GAZPROM PRODUCTION DOWN BY 17%

GAZPROM - October 3, 2022 - According to preliminary data, Gazprom produced 313.3 billion cubic meters of gas from January through September 2022. This is a decrease of 17.1 per cent (or 64.8 billion cubic meters) versus the same period of last year.

The domestic demand for the Company's supplies from the gas transmission system went down by 4.1 per cent (or 7.2 billion cubic meters) over said period.

Gas exports to the countries beyond the FSU amounted to 86.9 billion cubic meters, which is 40.4 per cent (or 58.9 billion cubic meters) lower than the figure for the same period of 2021. Gazprom delivers gas in compliance with confirmed requests.

Gas exports to China via the Power of Siberia pipeline keep growing within the framework of the long-term bilateral contract between Gazprom and CNPC. The supplies regularly exceed the daily contractual volumes. In September, two all-time maximums were recorded for the daily volume of exports in the entire history of supplies.

Reduced gas consumption in the EU was a key factor driving the decline in global demand for gas. According to the first preliminary estimates and the available current data, global gas demand dropped by about 40 billion cubic meters in the nine months of 2022. Out of this amount, 27 countries of the European Union account for 30 billion cubic meters, or 75 per cent.

Gas consumption went down in the UK as well, falling by some 5 billion cubic meters over said period of 2022. This means that the EU and the UK taken together account for almost 90 per cent in the decline observed in global gas demand.

According to Gas Infrastructure Europe, gas reserves contained in Europe's underground gas storage facilities were replenished by 62.8 billion cubic meters as of October 1. Companies will have to inject another 9.6 billion cubic meters of gas into the UGS facilities to get them to the levels observed at the start of the 2019–2020 withdrawal period.

Nevertheless, even getting the UGS facilities of major European countries to almost maximum levels of reserves would not guarantee a reliable performance in the upcoming autumn/winter period (AWP).

For instance, Germany's gas consumption in the preceding AWP (from October 1, 2021, to March 31, 2022) totaled 57 billion cubic meters, i.e. 9.5 billion cubic meters per month on average. Germany's UGS facilities are currently 92 per cent full, and their working gas inventories amount to 20 billion cubic meters. This means that the amounts of gas currently contained in Germany's storages are comparable to the average volume that is consumed within two (out of six) months of the AWP.

Also notable is the level of reserves observed at Ukraine's UGS facilities, which as of October 1 contained 14 billion cubic meters of gas out of the 19 billion required to be in stock by winter. Ukraine's representatives admit that filling up the storages is possible only in theory rather than in practice.

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