What will happen to Europe if Russia stops supplying gas
It will take 10-15 years to get back on your feet. For example, in Germany, which consumes part of the Russian gas consumed through pipes, there are no terminals for receiving LNG
A photo: REUTERS
“If they don’t have it in rubles, we’ll turn off the gas!” Approximately in this vein there were specific features of Russia and applications in the last weeks of March. The Russian side tried to “delight” the Europeans with the news that blue fuel should now be paid only in our currency. The Europeans thought and objected that the contracts contain dollars and euros, they, they say, will pay for …
Ultimately – as you most likely already know – Vladimir Putin foreigners will pay for Russian gas in rubles.
– Nothing is sold to us for free, and we are not going to do any charity either. That is, the existing contracts will be stopped,” Putin warned those who did not want to answer in rubles.
It’s gone:
– We have decided within the framework of the “Big Seven” that we will not accept the requirement to pay for gas in another currency, contracts must be respected, – said the Head of the Ministry of Finance of Justice. Bruno Le Maire.
– We fulfilled the contracts, it says that the payment was made in euros, sometimes in dollars. – I spoke with the President of Russia, – said the Chancellor of Germany. Olaf Scholz.
– low prices in euros or dollars, – joined the Prime Minister of Italy Mario Draghi.
But Russia’s message was very broad and unambiguous. So the Europeans have little choice. But do they really consume without our gas? Let’s figure it out.
PIPE CASE
– In 2021, we supplied 155 billion cubic meters of gas to European countries. This is 45% of gas imports throughout Europe, says the director of the Energy Development Fund Sergei Pikin.
But this data is only for one year. More global calculations were announced to us Pavel Spydell – financial analyst, trader, owner of the spydell_finance Telegram channel. According to his calculations, Russia “closes” about 60% of all proposals – up to 200-215 billion cubic meters – through the pipe and in LNG (liquefied natural gas). And Europe needs 350-360 billion cubic meters a year. Gas dependence on Russia is obvious.
But where does Europe get the rest? After Russia, Norway is the last supplier of gas to the EU countries. But its volume is two times lower than in Russia – about 30%. Then Algeria – 10-15%, Libya and Qatar – 5-10% each.
if these countries increased production? Yes, but both Libya and Qatar immediately warned that their gas would not be enough for the whole of Europe. And so they are not worth counting on. Azerbaijan also received requests to use the kit. But the entire volume of gas that falls on this country is drawn up under contracts with large and large, physically infrequently increasing production. Norway also needs to increase volumes beyond its strength – as needed, in the short term.
WILL THE WEST SAVE LNG
LNG is a liquefied gas that is not suitable by pipeline, but by tankers. Accordingly, it is more mobile, but also scarce. Because it is much less than the gas delivered through the pipeline.
According to last year’s statistics, the world’s top three LNG producers are Australia, Qatar and the United States. At the same time, America became an independent supplier of LNG in Europe in 2021 (26% of all such gas). And in January 2022, the US delivered more than half of all LNG imports to Europe in a month.
Is it possible that the trio will unite and provide European gas?
– And what about the rest of the world? – asks me back Sergei Pikin. – Each cubic meter of LNG is on schedule. The entire volume is attached. Southeast Asia, India, Latin America, Europe… To increase gas production, additional infrastructure is needed, billions and ten years in the most rosy prospect.
Europe will no longer be recommended for a prosperous life
Pavel Spydell assures that in two years the United States can increase LNG supplies to the foreign market, but not more than 25 billion cubic meters per year. For Europe, this will not be enough.
But here’s another problem. Even if all LNG suppliers increase the volume, Europe will not be able to get them. Now European terminals cover about 150-160 billion cubic meters per year. And for the implementation of life, we recall, they need up to 360 billion cubic meters.
– To accommodate Russia, Europe must double the capacity of the LNG terminal and reduce gas consumption by 10%, – sums up. Pavel Spidell.
IS IT REALLY TO REFUSE AT ALL?
– Really, – he said – as the deputy general director of the Environmental Safety Fund cut off on the air of Komsomolskaya Pravda radio Alexey Grivach. “But then they will jeopardize the energy supply of their consumers. And the consequences will be catastrophic.
Energy Expert Sergey Pikin lists these implications. Europeans will freeze, power generation will stop, and industry will follow. In addition, prices for all goods, utilities and gasoline have risen sharply. We’ll have to forget about entertainment. In a word, Europe will cease to be assigned to a prosperous life.
– It will take 10-15 years to get back on your feet, – Pikyain assured. – During this time, it will be necessary to build terminals and install pipes. For example, in Germany, which consumes part of the Russian gas consumed through pipes, there are no terminals for receiving LNG. But most importantly, it is necessary that suppliers increase the volume of gas. This is also recovery. But if everything works out, then after a summer dependence on our gas will be less, say, by a third. In 10 years – even less. In 15 years, the buyer countries will be completely free from us.
“But this can only be done through the internal gas consumption organs and the emphasis on LNG,” they produce Pavel Spidell.
BY THE WAY
Coercion to the ruble
According to the presidential decree, “unfriendly countries” will now be called in rubles for Russian gas. There are 48 of them, including the entire set of applications, the US and Japan. The rest of the states can use dollars and euros or other currencies that are convenient for use in settlements.
Why did Russia decide to switch to rubles? Here you can cost different versions: from conspiracy theories to jingoistic. Adherents are completely sure that now the dollar is a skiff, and the world currency will be established (well, or the yuan, and our “wooden” will triple somewhere near it). But let’s face it: this measure will not be able to bring down the US currency. Today, 70% of the most famous are in dollars.
In reality, everything is more prosaic. The director of the Energy Development Fund, Sergei Pikin, explained to Komsomolskaya Pravda that the transition to ruble settlement is a forced measure. If we continue to receive dollars and euros for our gas, the Europeans can freeze them at any moment. Like those $300 billion of Russian gold and foreign exchange reserves that were frozen after the start of special operations in Ukraine.
Here is how the calculation scheme will look now.
1. Buyers from “unfriendly countries” open two special accounts in the Russian “Gazprombank” – currency and ruble.
2. To the first account, foreigners transfer the currency in which they have paid so far, according to contracts (this, as they explain, is an exceptional, important point – previously fulfilled conditions are not violated).
3. The bank itself converts it on the Moscow Exchange into rubles and credits it to a ruble account.
4. From the ruble account is paid to “Gazprom”.
ONLY NUMBERS
How much gas from Russia do European countries receive
Bosnia and Herzegovina 70-100%
North Macedonia 70-100%
Moldova 70-100%
Finland 70-100%
Latvia 70-100%
Serbia 70-100%
Estonia 70-100%
Bulgaria 70-100%
Slovakia 60-70%
Croatia 60-70%
Czech Republic 60-70%
Austria 60-70%
Slovenia 40-50%
Hungary 40-50%
Poland 40-50%
Lithuania 40-50%
Italy 40-50%
Germany 40-50%
Greece 40-50%
France 25%
Netherlands 10%
Romania 10%
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