Russia's Gazprom Is In A Desperate Situation
Russia's Gazprom Is In A Desperate Situation429.06.2025, 9:47 1,916 They don't know where to put 60 billion cubic meters of unsold gas.After the loss of the European market and the failure of attempts to sign a new contract with China, Gazprom has accumulated a surplus of tens of billions of cubic meters of gas, and the authorities are trying to figure out how they can be used, Reuters reported, citing Russian officials and top managers of the company.Last year, Gazprom's production amounted to 416.19 billion cubic meters, of which only 355.23 billion cubic meters could be sold on foreign and domestic markets. As a result, Gazprom was left with about 60 billion cubic meters of unsold gas - a volume comparable to the annual production of some gas-producing countries (55 billion cubic meters in the UAE) and three times the annual consumption, for example, in Poland (20 billion cubic meters).The situation in the northern regions, where Gazprom's fields are located, is close to a critical point. Half a billion cubic meters of gas used to be pumped daily through pipelines to Europe, but now there are no such exports, and "the question of what to do with this gas is very urgent," said Alexei Chekunkov, head of the Ministry of Eastern Development, at SPIEF-2025.He said that one option could be to use gas for electricity generation under the artificial intelligence and blockchain industry. But the Ministry of Energy considers such a project unprofitable: gas is too expensive a source of energy for data centers, said Pavel Sorokin, deputy head of the ministry, at SPIEF. In his opinion, Gazprom's extra gas should be used to support the coal industry, which has suffered 200 billion rubles in losses since the beginning of 2023 and is on the verge of bankruptcy. "We can build (gas) power plants at (coal) mines," Sorokin suggested.With the world's largest gas reserves, Gazprom has been left without the ability to sell it. And the company's situation is "desperate," said oil and gas market expert Mikhail Krutikhin.Exports to Europe, which at their peak reached 200 billion cubic meters a year, now barely exceed 30 billion cubic meters and are at their lowest levels since the second half of the 1970s. And this year it may drop even more due to the cessation of transit through Ukraine. The Power of Siberia pipeline, even after reaching its full capacity (38 billion cubic meters), will compensate for only one-fifth of the lost volumes. Years of negotiations with China on a new gas contract have failed to produce results, followed by the failure of the gas hub project in Turkey.In January, President Vladimir Putin announced plans to sell 55 billion cubic meters of gas a year to Iran. But this calculation is "hardly justified", Krutikhin believes: "Firstly, Iran is not ready to become an intermediary in the re-export of Gazprom's gas - it has more than enough gas itself, and there are actually no options for selling it abroad. Secondly, the sale of Russian gas on the domestic Iranian market is a commercially hopeless business, given the extremely low subsidized prices."In 2023 Gazprom made a record loss of 629 billion rubles according to IFRS. At the end of last year, the company reported a profit, but Gazprom's gas business remained in a deep minus and generated another 1 trillion rubles in losses. To patch up the monopoly's budget, the authorities raised gas tariffs for households by 24% in 2022-24, and planned to raise them by another 46% in 2025-28."The overall picture is not in Gazprom's favor," Krutikhin states. - The colossal gas reserves (the largest in the world) cannot be monetized. No one has confidence in the reliability of this supplier. And if by some miracle he succeeds with the Chinese, the revenues from supplies will not pay off either the construction of gas transportation infrastructure or even the operating costs of gas production and transportation.PATREONSupport the website Write your comment 4 You can support the website Charter97.orgMULTI-CURRENCY ACCOUNT FOR ASSISTANCE:Bank's name: Bank Millennium S.A.Address: ul. Stanislawa Zaryna, 2A, 02-593, WarszawaIBAN: PL97116022020000000216711123SWIFT: BIGBPLPWName of the account holder: Fundacja “KARTA ‘97”Purpose/title of payment: Donation for statuary aimsYou can contact us by the e-mail charter97@gmail.comFollow Charter97.org social media accountsFacebookYouTubeX.comvkontakteok.ruInstagramRSSTelegram
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