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. Last Updated: 07/27/2016

Russia Falls Behind in Gas Supply, Agency Says

IEAWilliam Ramsay
LONDON -- Russia is in danger of failing to meet its gas export commitments to Europe, a top official from the International Energy Agency said Tuesday.

Delays to new projects caused by Kremlin moves to increase control over its energy sector may mean a supply shortfall, IEA deputy executive director William Ramsay said.

Moscow has put pressure on international companies building major gas projects to cede a stake in operations to its gas export monopoly Gazprom.

The disruptions to project development caused by this political interference were contributing to a supply shortfall, Ramsay told a conference. The IEA advises 26 industrialized countries on energy policy.

"The IEA believes that a supply gap has already started from Russia and that if it doesn't invest more, it is going to fall behind in deliveries to Europe," Ramsay said.

"Gazprom exerting its monopoly position has delayed the coming on stream of some of Russia's big gas projects."

Ramsay said Gazprom already had a small shortfall of 1 billion to 2 billion cubic meters of natural gas per year. It has been able to disguise that shortfall because the winter has been relatively mild, he said.

Raising the contract price of gas to some neighboring countries had also helped stem demand, freeing up more gas for export, he said.

But the shortfall in supply could rise as Gazprom concentrates on international acquisitions rather than on boosting output at home, Ramsay said.

After coming under pressure from the Kremlin, Royal Dutch Shell allowed Gazprom to buy half of its Sakhalin-2 oil and gas project in December.

TNK-BP, a joint venture between Britain's BP and a group of Russian billionaires, is also coming under pressure to sell Gazprom a stake in its huge Kovykta field in eastern Siberia.

"Doing business in Russia right now is very, very difficult," Ramsay said.