Russia Reports Record Domestic Gas Consumption Amid Europe’s Supply Shortages

Russian officials and gas industry representatives have promised to fully fulfill their commitments to European customers amid regional shortages caused by a perfect storm of natural and man-made factors. On Friday, Moscow indicated that Gazprom would work to create new production capacities if its European partners increased long-term contracts.

Russia is ready to increase the sale of natural gas to European customers despite recording “record” consumption of the clean carbon fuel at home, Deputy Prime Minister Alexander Novak has said.

“I would like to point out that Russia too has also seen record consumption of natural gas inside the country,” Novak said in a television interview Saturday.

The official said factors including the continuing economic recovery from the Covid-related crisis, unusually low water levels in rivers which power Russia’s hydroelectric power plants, and the impact of the long and cold winter of 2020-2021 have all contributed to domestic gas demand.

“We also removed a larger than usual amount of gas supplies from our underground storage facilities, and this required the pumping of additional fuel into these facilities,” Novak explained.

Novak stressed that high consumption of gas inside Russia will not impact its ability to fulfil its obligations to foreign customers. “We have the opportunity to fulfil contracts. If there are additional requests, they will of course be considered,” the official said. He added that Russian energy companies have yet to receive any requests for additional gas from European nations.

Russian producers are continuing to fill up the country’s underground gas storage facilities, with this process expected to wrap up by 1 November.

Novak also noted that Russia is prepared for dialogue with its European partners, not only for the current gas season, but future ones as well. “It is possible for such a situation to happen again,” he warned.

The official estimates that Europe’s underground gas storage facilities are at about 25 billion cubic meters below their typical levels. The European nations began withdrawing gas from storage facilities on Wednesday, with storage roughly 78 percent full – 14 points below the average recorded over the previous five years.

In a meeting with Russian deputy foreign minister Alexei Overchuk on Thursday, US undersecretary of state Wendy Sherman called on Russia to “do more” to ensure Europe’s energy security, according to a State Department press release. The request is a stark contrast to previous rhetoric coming from Washington, which has included blaming Moscow for the current gas supply shortages, accusations that Russia was using energy as a “weapon”, and efforts to sabotage Russian-European energy infrastructure projects such as Nord Stream 2. That pipeline is expected to become technically ready for operations in a matter of days, pending European regulatory approval, but could have been finished over a year earlier were it not for US sanctions against European contractors engaged in its construction. Once operating, Nord Stream 2 will be able to supply up to 55 billion cubic meters in additional Russian gas per year to a hub in Germany.

Speaking at the Russian Energy Forum on Wednesday, Russian President Vladimir Putin dismissed efforts in the US and elsewhere to blame Russia for the gas supply crunch, pointing out that Russia has increased its sales of gas to the region by 15 percent in the current years, while other countries, including the United States, have inexplicably reduced supplies.

Europe’s lower-than-usual gas reserves and skyrocketing futures prices are the consequence of a range of factors, including: the unusually cold winter and spring of 2020-2021, an effort by some nations to wait out high prices – and the subsequent failure to replenish supplies in the spring and summer, intense competition for supplies with Asia, and poorer than expected returns on investment for alternative sources of energy – like wind and solar power.

The US and some European nations have recently called on Russia to gas deliveries through Ukraine as a means to alleviating the current supply crunch. Russia says it will exceed its obligations on the use of Ukraine’s gas transit system, and deliver at least 40 billion cubic meters of gas through the network by the end of the year. In his remarks at the energy forum, Putin said Ukraine’s gas transit infrastructure was over 80 percent worn out, and warned that an accident could leave Europe without a major transit route if too much pressure was placed on the network via additional deliveries.

Russia presently accounts for over 40 percent of the natural gas consumed by European nations. Norway, Algeria and Qatar make up a quarter of the rest.