EU warned of years of high gas prices ahead

Gas prices in the EU will remain high for several more years, Russia’s vice-premier and former energy minister, Aleksander Novak said on Friday, warning of serious problems across Europe when the autumn-winter period starts.

Speaking at the St. Petersburg International Economic Forum, he said that the bloc needs to pump another 40-45 billion cubic meters (bcm) of gas before the beginning of the heating season, an amount equivalent to roughly four months’ worth of Russian supplies.

In 2021, the EU imported 155 bcm of natural gas from Russia, accounting for about 45% of its gas imports, and close to 40% of its total gas consumption.

Speaking about the current state of the Russian oil and gas industry, Novak said March was the most difficult for the industry but that companies have since adapted to the changes.

Gas production may decrease by about 4-5% this year to 730-750 billion cubic meters, Novak noted, suggesting, however, that the drop would not be felt too much as the gas output was at record levels the year before.

Russia has also begun to supply more liquified natural gas (LNG) to the EU, he added.

Speaking at the forum on Thursday, Novak reported that up to 95% of the Russian gas supplied to the bloc is now being paid for in rubles, as the majority of clients have accepted Moscow’s payment terms that were introduced in late March.

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