Russian gas industry outlook will remain bleak

Significance Production and export volumes rose last year. Domestic demand also increased, causing a sharp rise in domestic gas prices. Liquified natural gas (LNG) exports continued growing, with sales to European markets reaching record levels. However, transit across Ukraine ended at the end of the year. Impacts Gazprom’s 40% reduction of headcount at its St Petersburg headquarters will be followed by other cost savings. The increase in domestic gas market growth will result in higher tax payments to the federal budget. Any new EU sanctions on Russian LNG could severely harm Novatek and Moscow’s wider LNG ambitions.