• Analysis and Studies
• Natural gas: import and export

As winter arrives in the northern hemisphere, consumption of natural gas to heat homes, businesses, and commercial activities increases. This year's cold season will not be like any other for European countries: the war in Ukraine has cast doubt on the continent's dependence on Russian gas. In fact, the Russian Federation in 2020 was the world's second-largest exporter of gas in a gaseous state. Sanctions and increasing tensions between blocs have shown that energy is used as a geopolitical weapon. For months, Gazprom (Russia's state-owned gas company) has been using gas to pressure European Union countries, which, following the invasion of Ukraine, have imposed heavy economic sanctions on Russia.

European countries are going through a process of getting themselves independent from Russian gas. Indeed, major European countries like Italy and Germany used to rely on Russian gas imports, and in those months, we witnessed a change in energy policies and strategies.

Germany is the leading European country in terms of Russian gas consumption. Nearly 50% of its gas consumption came through the Nord Stream 1. It is a 1,200-km pipeline that runs under the Baltic Sea from the Russian coast near St. Petersburg to north-eastern Germany. It opened in 2011 and can send a maximum of 170 cubic meters of gas per day. It is owned and operated by Nord Stream AG, whose majority shareholder is Gazprom. The German government has approved a 65-billion-euro plan to help households ahead of the winter, when high energy prices, especially gas, are expected. 

Natural gas in the gaseous state: import and export

In order to get a better understanding of this situation, it is useful to look at the import and export of natural gas in 2020.  Before checking the data, one difference must be emphasized: natural gas can be exported in two ways. The first way is in gaseous form through pipelines, while the second way is through liquefaction. Liquefaction allows gas to be easily transported without the need to build expensive infrastructure such as pipelines. We will be looking at the first one. 

In 2020, the world trade of natural gas, exported through pipelines, was worth a total of $68.9 billion, making it the 24th most traded product. The world's leading exporter of gas in 2020 was Norway, with a total export of $12.2 billion. In the second place, not so distant, we have Russia, with a value of $11.7 billion in natural gas exports. Following are the United States ($5.54 billion), Turkmenistan ($5.31 billion), and Canada ($5 billion). China ($8.95 billion), Italy ($7.8 billion), Germany ($5.38 billion), the United States ($5.01 billion), and France ($4.32 billion) were the top importers of natural gas in the gaseous state. 

What is the future of European and Western energy policies?

As previously stated, European countries are pursuing new energy policies in order to gain greater independence from the Russian Federation. Indeed, we can’t predict when the Kremlin will stop the flow of gas through the pipelines. The G7 countries announced their intention to put a price cap on Russian gas. This measure is designed to reduce its revenues. More countries like Italy have been trying in recent months to renegotiate agreements with exporting countries to obtain more supplies. Algeria now is the leading supplier of gas for the country. Also, Italy is trying to push more imports of liquefied gas by building infrastructure for regasification, which is the process that converts liquefied gas back to its natural form.