Russia to reduce gas exports by about 25% by year's end: Deputy premier

Russia will reduce its gas exports by about a quarter by the end of 2022, according to Deputy Prime Minister Alexander Novak.

"At the end of the year, gas production will be 12% less than in 2021, and exports will decrease by about 25%. This is primarily due to the shutdown of export infrastructure," Novak said in an interview published by state news agency TASS on Monday.

Novak, however, pointed out that country's production and exports of liquefied natural gas (LNG) will grow by more than 8.7%, while coal consumption in the domestic market will increase by 6.8%.

He said a number of meetings were held with President Vladimir Putin since the end of February to analyze risks in Russia's logistics chain for oil and gas sales.

"As a result, a new configuration of supply chains was provided. Fast and well-coordinated work was organized by federal authorities under the leadership of Prime Minister Mikhail Mishustin, in conjunction with industry companies and legislators, who promptly considered government and industry initiatives," Novak said.

He said Western nations are introducing new sanctions because Russia was able to cope with their previous measures, warning that these restrictions will have side effects such as increased inflation and lower economic development rates.

He said many Western oil and gas companies "are already wary of all these processes" and pulling back on investments.

Due to the decrease in energy investments in the EU "the world will face a shortage and a new round of crisis," Novak asserted.

Warning of serious problems around the world within the next five to 10 years, he said Europe will be affected the most "as they have reduced Russian gas imports and are now focusing on LNG and the growth of their own production."

"However, resources there are very limited, and this increase will not be long-term," he claimed.

EU energy ministers last week agreed on a gas price cap of €180 ($190) per megawatt hour in the bloc, weeks after imposing an embargo on seaborne imports of Russian crude oil a price cap of $60 per barrel on Russian crude starting Dec. 5.

An EU ban on imports of petroleum products from Russia will also come into effect on Feb. 5.