Who Needs It, This "Gazprom"?
- 15.05.2025, 13:40
The desperate situation of Russia's gas export monopoly.
According to numerous reports in the pro-government media, there is almost a queue for new contracts to buy Russian gas.
"Well, we are raising this topic with the Americans," said Putin's foreign affairs aide, Yuri Ushakov, when asked whether Russia and the United States are really discussing the resumption of Russian gas supplies to Europe.
Reuters reported on such talks, citing as many as eight anonymous sources. Some German politicians - predictably those sympathetic to Putin's regime - have repeatedly spoken in favor of restoring gas supplies through the Nord Stream pipeline. And Slovak Prime Minister Robert Fitzo has called for the resumption of Russian gas transit through Ukraine.
At the same time, Moscow officials claim that the Chinese may agree to import gas via a new eastern route - the so-called "Siberia-2", which Beijing has been refusing and denying for years.
Another promising direction for gas supplies in Gazprom is Iran, which is allegedly ready to receive up to 55 billion cubic meters per year. And for the Bulgarian section of the Turkish Stream gas pipeline, it is rumored that an American investor has been found who wants to "strengthen Moscow's fuel supplies."
The deluge of "wants" in the media reflects the desperate situation of Russia's gas export monopoly. Having started a gradual withdrawal from the European market in 2021 at the behest of the Kremlin, Gazprom has cut its supplies to Europe from 157 billion cubic meters to 54 billion in 2024, and may send less than 40 billion cubic meters there this year. Russia's gas supplies to the EU are at their lowest level in 45 years.
The transformation of an industrial giant into a tool of political blackmail is not cheap for Gazprom. The company's losses from withdrawal from the European market are estimated at $40 billion a year, and feverish efforts to find new markets are failing.
Europeans, to whom the Russian supplier has given many reasons to be convinced of its unreliability, are determined. The European Commission strengthened the provisions of the REPowerEU plan adopted in 2022, which required a complete refusal to supply gas and oil from Russia by 2027, and presented a new plan to develop this idea, including uranium supplies in the future ban.
As for the prospects of restoring pumping through Nord Stream, the position of the host country, Germany, is reduced to a categorical refusal, which has not ceased to be stated in the government of this country. And there are no American investors on the horizon who would be tempted by the role of an intermediary between the discredited Gazprom and Europe. Europe is doing fine without Russian gas, except for Serbia, Hungary and Slovakia - Putin's "friends," and even those will have to fulfill their obligations to the EU by 2027 and give up these supplies.
As for Russia's plans for the Siberia-2 Force, the Chinese persuasion has not borne fruit so far. Deputy Prime Minister Alexander Novak
appears to have interpreted the Chinese position very loosely when he announced that Putin and Si Jinping had given instructions to speed up the project. In fact, it is not "implementation" that the two sides should accelerate, but rather non-binding negotiations on the subject. There are no agreements on this gas pipeline and are not expected in the near future.
All that Gazprom is really doing in the eastern direction is trying to save the first Siberian Power, which has already been built, and fulfill its contractual obligations. The company is building an intra-Russian version of the "Power of Siberia-2" in Siberia "piece by piece" in order to provide the contract signed in a hurry with gas, under the guise of caring about the gasification of Russian regions. At irregular negotiations, the Russian side is trying to induce Beijing to buy additional volumes of gas by tempting the Chinese with huge discounts in the price.
As for the southern direction of exports, counting on Iran is hardly justified.
Firstly, Iran is not ready to become an intermediary in re-exporting Gazprom's gas - it has more than enough gas itself, and there are actually no options for selling it abroad.
Secondly, selling Russian gas on the Iranian domestic market is a commercially hopeless business, given the extremely low subsidized prices.
And thirdly, the existing gas transportation infrastructure of the route from Russia through Azerbaijan to Iran is designed to pump a maximum of 2.8 billion cubic meters per year, and laying new main pipelines requires time, money and Azerbaijan's consent (which is not guaranteed at all, especially after Russia shot down an Azerbaijani plane over Grozny and did not apologize).
Expanding supplies to the EU via Turkish Stream? Even if the US investor's intentions for the Bulgarian section are real, it has no effect on the flow of gas from Russia along that route. But what really plays the main role on this route is Turkey's intention to create a gas "hub" on its territory, from which not Gazprom's gas, but "Turkish mixture" will flow to the EU through Bulgaria.
Turkey intends to turn into a major supplier of gas without Russia's participation, which this country receives not only from Russia, but also from Azerbaijan, Iran, Turkmenistan (under the scheme of substitution through Iran) and in liquefied form from several sources. In addition, Turkey itself is expanding gas production at fields in the Black Sea. "Gazprom has nothing to rely on here.
The overall picture is not in Gazprom's favor. 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 it succeeds with the Chinese, the revenues from supplies will not pay off neither the construction of gas transportation infrastructure nor even the operating costs of gas production and transportation. There is no smell of commerce here.
Mikhail Krutikhin, The Moscow Times