EU gas consumption rises after two years, Russian gas imports also increase year on year

Gas consumption in the final quarter of last year rose by 1 %. This was the first increase in the past two years, during which Europe was first hit by an energy crisis related, among other things, to the shift away from imports of energy commodities from Russia. Gas imports from Russia nevertheless increased during the quarter, by 16 % compared with the previous quarter and by as much as 19 % year on year, European Commission data show. 

Following a positive report on rising natural gas consumption in the Czech Republic, similar news is now coming from the European Union. Gas consumption in the EU-27 rose for the first time since the fourth quarter of 2021.

At the European level, as in the Czech Republic, this is a relatively minor change. Consumption increased by just 0,6 %. Nevertheless, the report may indicate that lower natural gas prices on wholesale markets have at least brought the two-year downward trend to a halt.

Natural gas consumption in Europe as a whole fell to 330 bn m3 in 2023. Compared with 2021, when it can still be argued that gas consumption was not as heavily affected by the energy crisis, it declined by a fifth (from 413 bn m3).

As in the Czech Republic, gas consumption at the European level did not increase solely because of higher gas use by gas-fired power plants. These plants account for a significant share of total gas consumption (at least in the Czech Republic), and in years when electricity generation in gas-fired power plants is profitable, they can substantially affect a country's gas consumption. In the European Union, gas-fired power plants burned a fifth less gas year on year in the quarter concerned.

Russian gas imports return, new sanctions to target Russian LNG

The European Union remains dependent on natural gas imports. The EU can cover only around a fifth of its gas consumption through domestic production, due to the gradual phase-out of gas extraction at the Groningen field in the Netherlands.

Natural gas originating from the Russian Federation accounted for around 17 % of all gas imported into the European Union. Year on year, gas imports from Russia even increased by 19 %.

Despite the increase in Russian gas imports in the final quarter of 2023, it is clear that such imports have fallen significantly over the longer term. At the beginning of 2021, almost half of imported gas still originated in Russia. After the energy crisis, however, it was partly replaced by liquefied natural gas and higher supplies from Norway.

A ban on Russian gas imports has been a frequent topic in recent months. The European Commission is currently preparing its 14th package of sanctions against Russia. It is expected to be finalised later this month. However, the package is unlikely to ban imports of Russian gas (including in the form of LNG), but only the transshipment of LNG at European terminals.

"This fourteenth sanctions package is the first to partially concern LNG trade, specifically its transshipment," Simson said in an interview with S&P Global.