Russian pipeline gas flow to Europe in April was down 6% month on month, but up 10.3% year on year, as buyers opted for more supply from Gazprom because it is currently cheaper than LNG.

Average daily Russian pipeline exports fell to 83.4mn cubic metres in April, from 88.7 mcm in March, but up from 75.6 mcm in April last year, according to data from the European gas transmission group Entsog and Gazprom’s daily reports. Russian pipeline gas in the first four months of this year totalled 10.2bn cubic metres.

Europe has large stockpiles of gas, following another mild winter, which has caused TTF spot prices to slide to pre-crisis levels. But those spot prices – which roughly correlate to average LNG prices – are currently more expensive than Russian pipeline supplies, because of the price indexation in contracts. Asian LNG demand has recovered this year, with the market regaining its traditional premium versus Europe, allowing it to attract more supply.

At the same time, European gas demand remains sluggish, as a result of demand reduction and destruction that took place in 2022 and 2023, and some of this consumption is not expected to return as a result of increased efficiency and industrial closures. Another factor has been strong renewables output, which has limited gas use in power generation.

While overall EU power generation increased by a modest 1.1% y/y in the first quarter, hydro, renewable and nuclear output were up by 25%, 12% and 4% respectively, while gas power generation was down 10%, and coal-fired electricity down 24%.

Russian pipeline supply has drastically fallen over the past two years as a result of the Kremlin’s weaponisation of gas. Shipments fell to 28.3 bcm in 2023, down from 63.8 bcm in the previous year and 175-180 bcm in 2018-2019.

At the same time, Gazprom has been ramping up gas sales to China, with deliveries rising to 22.7 bcm last year from 15.3 bcm in 2022.