Natural gas to continue gaining increased importance in global energy mix

The Gazprom Board of Directors took note of the information about the impact of the events of 2023 on the long-term outlook for the global energy market.

It was highlighted that a resumption of demand for energy resources has been observed worldwide throughout 2023. At the same time, geopolitical factors, prevalence of politically motivated decisions in energy policies of some countries, high energy security risks, and price volatility continue to exert their negative influence on the global energy sector.

The most visible effect of the crisis events is observed in Europe's gas market, where the demand for natural gas is being artificially destructed for the first time ever in the history of the global energy industry. Preliminary estimates show that in the first eleven months of 2023, gas consumption in European countries beyond the FSU fell by 34 billion cubic meters and is currently at the level of the year 1996. At the same time, unlike in 2022, gas production in said region has again started to decline. In the first eleven months of 2023, it decreased by 18 billion cubic meters, with 9 billion cubic meters of this amount attributed to the main producer, i.e. Norway. Therefore, energy security risks become considerably higher for European countries, especially in winter months.

In the current year, a considerable growth in gas demand was recorded in the Asia-Pacific region. The driver behind the growth in gas consumption is China. Russian gas plays a major role in ensuring the reliability of gas supplies across this country. In the first eleven months of 2023, the growth in Gazprom's pipeline gas supplies covered about a half of the additional gas volumes imported by China. In addition, gas supplies via the Power of Siberia pipeline in the period from mid-November to the end of 2023 have been considerably increased in accordance with the previously signed Supplementary Agreement to Gazprom and CNPC's Sales and Purchase Agreement.

Considering the uncertainty of the global energy market development, many countries have demonstrated an increased attention to the matters of energy security. The world investment into hydrocarbon development and production in 2023 has reached 124 per cent as compared to the year 2020. The meeting of the Board of Directors noted that fossil fuels will remain the mainstay of the global energy mix in the long term. At the same time, natural gas will continue gaining increased importance in the global energy mix.

Among the ongoing changes in the world's energy markets, Gazprom continues its work to ensure highly reliable gas supplies to Russian consumers and the growth of export potential. An important line of the Company's activities is the strengthening of cooperation with Kazakhstan, Uzbekistan and Kyrgyzstan.

The issue of the impact of the events of 2023 on the long-term outlook for the global energy market was previously considered by the Gazprom Management Committee.