Russian gas in Europe: Yesterday, Today, Tomorrow.

An in-depth analysis of recent developments and prospects in Europe-Russia gas relations

 With quality information from Russia getting increasingly scarce, the Russian natural gas market has become more and more of a black box. In its latest report “Russian gas in Europe: Yesterday, Today, Tomorrow. An in-depth analysis of recent developments and prospects in Europe-Russia gas relations”, CEDIGAZ tracks the unprecedented changes between glorious “yesterday” (2018-2021), gloomy “today” (2022-Q1 2023) of Russian gas (both pipeline and LNG) in Europe, including the evolution of the European countries’ dependence on Russian gas, using data still available. The report also discusses possible futures for Russian gas in Europe after 2023 (“tomorrow”) – given new inputs, including selected pipeline export routes limitations, the Turkish natural gas hub initiative, and Russian LNG project developments.

Energy security and sustainability mean a restructuring of global gas supply and a reconfiguration of international gas flows

CEDIGAZ, the International Gas Association, has just released its « Medium and Long Term Gas and LNG Outlook 2023 », which provides projections on natural gas and low-carbon gases markets to 2050.

CEDIGAZ Reference Scenario assumes a strong acceleration of the energy transition towards a low-carbon economy, incorporating specific government targets and CO2 emissions reduction commitments, corresponding to a global warming of 2.1 °C by 2100. The evolution of the world energy mix is driven by strong energy efficiency improvements, a fast expansion of clean electrification and low-carbon technologies. CEDIGAZ 2.1 °C Scenario highlights that natural gas and low-carbon gases will play an important role in a context of the decarbonization of the world energy system. Natural gas will be gradually supplanted by low-carbon gases in OECD markets, whereas in non-OECD markets, especially in Asia, both natural gas and low-carbon gases will grow significantly in the long term. Additional investments in new international gas and LNG projects are required to meet future global demand. Achieving carbon neutrality, energy security and sustainability will mean profound changes in global gas dynamics and a rebalancing of global gas flows towards Asia. Decarbonization efforts imply the reduction of all GHG, including methane emissions, along the whole international supply chains. The expansion of low-carbon gases, especially hydrogen, requires a supportive and appropriate political and regulatory framework as well as an adaptation of natural gas infrastructure to a future low-carbon economy.

Natural gas has a crucial role to play in the current transition to a low carbon economy, raising investment challenges which have become even more prominent in the current period of economic crisis and low prices.

CEDIGAZ, the International Information Center on Natural Gas, has just released its « Medium and Long Term Natural Gas and LNG Outlooks 2020 ». Cedigaz Scenario assumes the effective realisation of official energy plans and climate policy targets. It is built upon the implementation of strong energy efficiency programmes and the expansion of low carbon technologies. It highlights that natural gas will play a growing role in the world energy mix to meet both the growing energy demand and climate policy targets. The future expansion of natural gas in the energy mix is driven by the competitiveness and abundance of resources in gas-rich countries (North America, Russia, Middle East… ), which will expand LNG export capacities required to meet the growing gas demand, especially in emerging Asian markets. Despite a post-pandemic recovery assumed post-2021, the Covid-19 pandemic has a meaningful impact on the economy, investments, energy prices and gas demand in the short and medium term. Therefore, the future expansion of gas in the next two decades is conditioned on the timely materialization of investments, especially in the upstream and LNG business, which represents a key challenge in a context of low oil and gas prices.