BAKU, Azerbaijan, April 18. The fluctuations in Russian pipeline supply to Europe are likely to continue within the present corridor, Trend reports with reference to the Oxford Institute of Energy Studies (OIES).
“Looking ahead, it seems unlikely that the Nord Stream pipeline will be repaired any time soon. At the beginning of March 2023, it was reported that the pipeline will be ‘mothballed’, pending a long-term decision on its future, namely whether to repair or dismantle it. Restarting Nord Stream would also require a resolution of the issues pertaining to turbines at the Portovaya compressor station in Russia, which caused the initial drop in Nord Stream capacity between June and August 2022. Elsewhere, the transit of gas via Poland would require the removal of Polish and Russian sanctions and countersanctions, which appears unlikely in the near term,” reads the latest OIES report.
The report reveals that aside from physical constraints, the demand for payment in rubles is likely to keep several Gazprom long-term contracts for supply to Europe suspended.
“Therefore, the fluctuations in Russian pipeline supply to Europe are likely to continue within the present corridor of approximately 40-70 MMcm/d. This implies a substantial year-on-year decline in Russian pipeline supply to Europe in both Q2 and Q3 2023. The range of 42-71 MMcm/d implies that between 3.9 – 6.5 Bcm of Russian pipeline gas will be delivered to Europe in both Q2 and Q3 2023. For comparison, supply was 21.3 Bcm in Q2 2022 and 9.4 Bcm in Q3 2022. In Q1 2023, the year-on-year decline in Russian pipeline supply to Europe was 21 Bcm, with supply declining from 26.2 Bcm in Q1 2022 to 5.2 Bcm in Q1 2023,” the Oxford Institute analysts say.
The report says that assuming Russian pipeline supply of 5.2 Bcm in both Q2 and Q3 2023, the total year-on-year decline in Russian pipeline supply to Europe in the period Q1-3 2023 is likely to be roughly 41.3 Bcm (declining from 56.9 Bcm in 2022 to 15.6 Bcm in 2023). The major balancing item that will compensate for this decline will be lower storage injections in summer 2023, made possible by the fact that Europe begins the summer injection season with record stock levels.
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