Vladimir Putin recently criticized the West’s “direct attempts” to “hinder the development” of Gazprom, the national gas giant that has been targeted by international sanctions for the past year. Putin made the statement during a video conference speech on the occasion of the company’s 30th anniversary.
European and American sanctions against Russia in retaliation for Russia’s military intervention in Ukraine have hit the Russian gas sector hard. Gas exports fell by 25.1% in 2022, with the European Union significantly reducing its imports of Russian gas. However, Gazprom has launched new projects to cope with the situation.
A virtually closed European market
Europeans have almost completely stopped importing Russian gas through pipelines. However, they continue to purchase liquefied natural gas (LNG) transported by sea on LNG carriers. Gazprom, which has a monopoly on Russian gas exports by pipeline, has redirected part of its exports to Asia, where energy demand is strong.
Redirecting gas exports is difficult for Russia
Some observers believe that it is more difficult for Russia to redirect its gas exports than for oil, which has also been heavily sanctioned, because the necessary infrastructure (gas pipeline, plants and LNG tankers…) is particularly expensive and takes time to build. Despite this, Gazprom has announced that it plans to begin construction as early as 2024 of a new gas pipeline, “Siberian Force 2”, to northwest China.
Gazprom, “one of the engines” of Russian national growth
With nearly half a million employees, Gazprom, which holds the largest gas reserves in the world, is “one of the engines” of Russian national growth, Vladimir Putin said. Although the sanctions have affected the company’s results, Gazprom has launched new projects to cope with the situation. Time will tell if the shift in its export focus to Asia will be enough to keep the company afloat.
