The main trends in the development of the European natural gas market during 2023 are expected to be:
1) Further reduction of natural gas supplies to the EU, which will require a reduction in the level of energy consumption from 15% (relative to 2022). Thus, a decrease in gas supply from the Russian Federation is expected by 33 billion cubic meters, a decrease in own gas production (EU+WB) by 7 billion cubic meters, a drop in pipeline gas imports from other sources – by 3 billion cubic meters;
2) The decrease in Russian supplies and the drop in gas production will be partially compensated by the increase in LNG imports by 8 billion cubic meters and the increase of gas from underground storages – up to 30 billion cubic meters. According to the results of 2023, the total volume of gas consumption in the EU is expected to be at 427 billion cubic meters (433 billion cubic meters in 2022);
3) The growth potential of the European regasification infrastructure (LNG to natural gas) is estimated at the level of 60 billion cubic meters to a total of 300 billion cubic meters in 2023;
According to the assessment of the expert F.-R. Mouton (Francois-Regis Mouton), director of the European branch of the IOGP (International Association of Oil and Gas Producers), the cessation of the transit of Russian gas through Ukraine and the absence of Russian supplies will lead to a shortage of energy resources in the EU during 2023 – from 12 to 19% (from the average level of consumption in 2017-21); in 2024 – from 10 to 16%; in 2025 – from 8 to 14%.
The expert draws attention to the fact that it is about the level of deficit that cannot be compensated by available supplies from other sources, including the global LNG market. It is assumed that the gas balance in the EU countries will be reduced due to the limitation of gas consumption in industry. During this period (2023-2025), European governments will resort to politically motivated measures of financial, regulatory, fiscal support for consumers (households, enterprises).
The source considers the agreement of the European side to resume the practice of long-term contracts (up to 15 years) with potential alternative suppliers to Russian imports (Azerbaijan, Qatar, Mozambique) to be a necessary condition for exiting the state of energy crisis, starting from 2026. The rebalancing of the European gas market will ensure the stabilization of prices at the pre-crisis level (2021).
According to the expert, the implementation of mechanisms for accumulation of needs and joint gas procurement of the European Energy Platform (declared goals – stabilisation of prices and maintenance of industrial consumers on the territory of the EU; model – joint procurement by the European Union of vaccines against COVID19) acts, first of all, as a political tool aimed at meeting expectations consumers regarding government actions to solve the energy crisis. The functionality of such a mechanism in the conditions of the heterogeneous EU gas market (different gas logistics conditions, price expectations, seasonal needs of member countries), according to the expert, is unlikely.
