Ex-Russian deputy finance minister explains what Russia’s loss of European gas market means

15 September, 03:51 PM
Nord Stream transfer station on the German coast of the Baltic Sea, Lubmin, Germany (Photo:REUTERS/Lisi Niesner)

Nord Stream transfer station on the German coast of the Baltic Sea, Lubmin, Germany (Photo:REUTERS/Lisi Niesner)

Russia will not be able to sell gas intended for sale to Europe to other consumers, Sergey Aleksashenko, former Russian Deputy Finance Minister and former First Deputy Chairman of the Board of the Russian Central Bank, told NV in an interview on Sept. 15.

Aleksashenko, who now lives in Washington, commented on the issue of Russian gas sales markets and the possibility of redirecting its sales.

“The gas pipeline cannot be returned,” he said.

“It is oil in tankers that can be sent to another point. (When) gas exports to Europe fell, production immediately decreased. They just close the well. If Gazprom suddenly starts increasing volumes in five years and by this time builds another gas pipeline and starts to replace Europe, that will be a very good scenario (for it). (But) Russia won’t be able to sell the gas going to Europe anywhere.”

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At the same time, the Russian economist said the loss would not be a critical one for the Russian budget.

According to Aleksashenko, revenues from gas make up less than 20% of the total volume of Russian oil and gas revenues.

“If we consider that oil and gas revenues make up 40% of the federal budget on average, then count 20% of them (if they are completely lost, although Turkey and China remain), it turns out to be 6-7% of the income to the federal budget,” he said.

“This is bad for the budget, but not critical.”

Earlier Austrian President Alexander van der Bellen said Russian dictator Vladimir Putin was using every cubic meter of Russia’s exported gas to split Europe.

As reported earlier, the Nord Stream-1 gas pipeline was not put into operation after maintenance (Aug. 31 – Sept. 2). Gazprom said this was die to an oil leak in a Germ,an-made Siemens turbine.

However, Kremlin spokesman Dmitry Peskov then said on Sept. 5 that the Nord Stream gas supply would not be restored until the West lifts sanctions against Russia and Gazprom.

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