“Now we are facing a stagnant demand both for oil and gas globally. These two commodities are providing 70% of Russian export and 50% of Russian federal budget revenues, so you can imagine how painful that is.”

Gazprom revived its contract with Italian contractor Saipem (controlled by state-run Eni SpA). The Milan-based company had signed two contracts worth €2.4 bn in total for the construction of an undersea pipeline and support services for construction of a second undersea pipeline, both part of much touted South Stream. The contract terms are now being renegotiated, so as to start construction in time for the 2016 deadline.

The most significant development on the supply side in 2014 was undoubtedly the continuing revolution in US shale. The US recorded the largest increase in oil production in the world, becoming the first country ever to increase average annual production by at least 1 million barrels per day for three consecutive years.

More than $100bn of investment has been deferred or scrapped in response to the near-50 per cent plunge in crude over the past year.

Not quite as severe as in the UK, he says the trend is similar in the Netherlands, considering the decline in Groningen and the curtail in production: “Moving from a net exporter of gas to a net importer of gas.” The situation across the entire EU, according to Mr. Egan, is even worse, with the European Union importing 80% of its gas, forecast to get even worse.

Falling oil prices have resulted in much lower gas prices in many parts of the word. As a result, gas demand is enjoying the tailwind of substantial price drops while the upstream sector is suffering amid large capital expenditure cuts.

Examining the essential gas transmission infrastructure projects in Europe alone - without taking into account the upstream sector – according to the European Commission, investments of at least 70 billion EUR are required by 2020, while EU funding will provide €4.7 billion for both gas and electricity PCIs between 2014 and 2020, subject to final approval of the European Fund for Strategic Investments (in 2015).

Russia is still likely to be Europe's biggest supplier of gas. Volume-wise, no one will be able to compete with Russia in Europe, at least for the next two decades.

Nearly a year after oil markets entered a deep downward spiral, unmoored from the $100-a-barrel mark that had anchored them for years, some OPEC members are publicly talking for the first time about a new "fair" price for their crude.

OAO Gazprom, the biggest natural gas producer, will probably see lower gains in Europe for at least four years as weaker oil prices and rising competition threaten to further cut its profits, a government forecast showed.

OPEC, which controls a third of the global oil market, and Russia, which produces another 12 percent, are unlikely to reverse their output strategy.

Russian energy company Gazprom has made it clear that it intends to move forward with the construction of the Turkish Stream natural gas pipeline as quickly as possible, whether or not the project can overcome political obstacles in Europe.

The dollar was a contributing factor to oil’s crash between June and January as it rose 16 per cent against a basket of other currencies. However, the 60 per cent decline in crude from about $115 to $45 a barrel over the same period illustrates how crude was largely trading on its own fundamentals, as the US shale boom contributed to oversupply.

Last December Moscow took Europe by surprise with an announcement that South Stream, a 63 billion cubic metre (bcm) pipeline designed to bring Russian natural gas to southern Europe across the Black Sea would be scrapped and replaced with a pipeline of similar capacity that would cross Turkey and stop at its border with Greece.

Russian natural gas accounts for roughly a third of all foreign supplied natural gas coming into Europe. Russia’s biggest partner is Germany. In that state, Russia’s presence is on the upswing.