The head of Total predicted tension in the European gas market in 2023

European countries will have to replenish their gas reserves in the summer without Russian supplies, the situation in the gas market will become tense again, said Patrick Pouyanne, CEO of TotalEnergies.

“Europe will receive less Russian gas than in 2022 and will have to import LNG in bulk again. The situation will become more tense again.” said Pouyanne to L’Echo newspaper (Bloomberg quote).

According to the head of Total, European countries should diversify energy supplies, mainly through long-term contracts. There is no risk of a shortage of diesel fuel in the region, Pouyanne said. The French company intends to give priority to deliveries to Europe from its refineries located in Saudi Arabia, however, according to him, this will entail additional transportation costs.

In March 2022, spot prices set a new all-time high, approaching $3,900 per 1,000 cubic meters. m. Then the quotes gradually declined, but in August they again switched to a sharp increase, although they could not beat the March record.

Exchange gas prices in Europe on January 17, 2023, for the first time since August 2021, fell below $600 per 1,000 cubic meters. m, according to the ICE exchange. Analysts attributed the long decline in gas prices to significant fuel reserves in European underground gas storages (UGS) against the backdrop of warm weather in Europe and the development of wind farms.

According to the High Representative of the European Union for Foreign Affairs and Security Policy, Josep Borrell, European countries in a few months got rid of from energy dependence on Russia, which has been building up over the years, and the EU has already gone through an “extremely stressful phase of rising prices.”

Export of Gazprom to key foreign markets shrunk almost doubled in 2022, reaching the lowest level since at least the turn of the century, Bloomberg reported earlier. At the same time, deliveries of Russian gas to China via the Power of Siberia gas pipeline last year grew up 1.5 times the level of the previous year and reached a record value of 15.5 billion cubic meters. m.