Gas price in 2022 may remain at high levels - Novak

The cost of gas in 2022 may remain at high levels, Russian Deputy Prime Minister Alexander Novak told Rossiya-24 TV channel in an interview on Friday, News.Az reports citing TASS. 

"The balance of supply and demand is such that the price for gas is quite high. I think that next year it will remain high," Novak said.

Novak added that Russia has always been in favor of long-term gas contracts. "When import in Europe is about 250-300 bln cubic meters of gas, then you need to understand where it will come from and be able to rely on that supply, first and foremost on a long-term contract," he said.

The global gas market this year faced a supply crunch amid a sharp recovery in Asian demand and a shortage of LNG capacity. The increased demand for gas in Asia caused a rise in prices and pulled off the main supply of LNG, which contributed to the intensification of the crisis in Europe. There, the situation was aggravated by low reserves in gas storage facilities.

Due to this factor, the gas price at the Dutch TTF hub this fall for the first time in history exceeded $1000 per 1000 cubic meter mark and in December over $2000 per 1000 cubic meters. However, the price of futures on the TTF hub is volatile due to the speculative factor and does not reflect the real price of physical supplies to Europe. The average gas export price under Gazprom contracts in 2021 will be $280 per 1000 cubic meters.


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