Russia: Gazprom will need at least a decade to recover the gas sales volumes lost due to sanctions

The Russian energy company Gazprom It is unlikely that it will be able to recover the natural gas sales volumes lost following the invasion of Ukraine within a decade. This was reported in a report commissioned by Gazprom itself and taken up by the British newspaper "Financial Times". The company's exports to Europe will average between 50 and 75 billion cubic meters per year by 2035, just a third of pre-war levels, according to estimates from the Russian energy giant. Although Gazprom hopes that building a new gas pipeline to China – Power of Siberia-2 – will help offset lost European export volumes, its capacity will be only 50 billion cubic meters per year and prices fixed with Beijing they are much lower than those with European countries, as the company's experts note in the report. An agreement on the construction of the connecting infrastructure with China, which should pass through Mongolia, has yet to be reached, Gazprom adds.

“The main consequences of the sanctions for Gazprom and the energy industry are the contraction of export volumes, which will be restored to the 2020 level no earlier than 2035,” the authors of the document wrote. The 151-page report, commissioned by company management and compiled late last year, is among the most candid acknowledgments yet of how Western sanctions imposed in response to Russia's war have damaged Gazprom and the broader Russian energy sector, according to the “Financial Times”.