Russian gas production falls 3.1% in January

Russian natural gas production fell by 3.1% year on year to 64.8bn cubic metres in January 2025, marking the first annual decline in a month since mid-2023, the Moscow-based Vedomosti newspaper reported on February 25, citing sources familiar with energy ministry data.

Compared to December 2024, gas output also declined by 2.6%. However, January's production remained above last year’s average monthly output of 59 bcm.

The drop comes after Russia halted gas supplies to Europe via Ukraine on January 1, after the expiry of Moscow’s long-term transit agreement with Kyiv. Russia has increased flow via the TurkStream to provide more gas to Hungary and Slovakia, but the pipeline lacks the spare capacity to fully offset lost deliveries through Ukraine. Gazprom boosted exports to Europe via TurkStream by 27% to 1.57 bcm in January, but in absolute terms this increase amounted to just 300mn cubic metres.

Both Gazprom and independent producers reduced production volumes in January. According to sources, the energy ministry’s statistics traditionally group Gazprom’s production under "other" producers, whose combined output fell by about 3% to 43.3 bcm. One source estimated that Gazprom alone accounted for 36 bcm of gas output, excluding output from its joint ventures, also down 3% y/y.

Other major producers also reduced production, though at varying rates. Novatek's output fell 1% to 7.2 bcm, Gazprom Neft’s production declined by 2% to 2.6 bcm and Lukoil’s dropped by 3% to 1.5 bcm. Gas production under production-sharing agreements, covering projects such as Sakhalin-1, Sakhalin-2 and Kharyaga, decreased by 2.5% to 2.4 bcm.

Russia's gas production had been increasing annually since July 2023, rebounding from the sharp decline in 2022 triggered by the halt in exports to Europe via Nord Stream and reduced transit through Ukraine. Pipeline exports from Russia fell by half in 2022 to 142.1 bcm, then dropped another 30% in 2023 to 99.6 bcm, according to the energy ministry. Domestic gas production declined by 12% to 673.8 bcm in 2022 and by 5.5% to 636.9 bcm in 2023. However, in 2024, production rose 8% to 685 bcm, with Deputy Prime Minister Alexander Novak attributing the increase to higher domestic demand, particularly from the petrochemical sector, and expanded exports, primarily to China.

Beyond the halt in transit through Ukraine, lower domestic heating demand owing to mild winter temperatures was also a factor behind the decline in output, experts told Vedomosti. Central Asia also experienced mild weather, preventing increased Russian gas exports to the region.

In 2024, gas deliveries through Ukraine’s pipeline network accounted for about 2% of Russia’s total production, Bulat Mudarisov, an analyst at BCS World of Investments, told the newspaper. Russian gas exports through Ukraine amounted to 1.3 bcm in January 2024 and 15.4 bcm for the whole of last year.

Offsetting the end of Ukraine transit, Gazprom is due to ramp up gas shipments to China via the Power of Siberia this year to 38 bcm, from around 31 bcm in 2024. Deliveries to Central Asia should also grow.