Russia burns $10 million worth of natural gas per day.

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State gas giant Gazprom is on fire, or “on fire.” 4.34 million cubic meters of gas per day at a new liquefied natural gas (LNG) facility, according to Rystad Energy’s analysis of temperature and satellite data.

That’s 1.6 billion cubic meters a year, or about 0.5% of the EU’s gas demand, and worth about $10 million a day based on last week’s European spot gas prices. Rystad’s analysis was first reported by the BBC on Friday.

Rystad said Russia is burning gas that could have been sent to Europe via pipeline, which normally accounts for more than a third of Europe’s gas imports, but the flow has been restored to only 20% of normal levels.

Gazprom, Russia’s state energy company, did not immediately respond to CNN’s request.

In general, gas exports from Russia to Europe have decreased by 77% this year compared to the same period in 2021, according to Rystad. Last year, Moscow accounted for 45 percent of the EU’s total gas imports, according to data from the International Energy Agency.

The alliance has been trying to wean itself off Russian gas since it invaded Ukraine six months ago. They are racing to fill storage facilities, reduce demand and secure alternative energy sources to avoid power outages this winter.

So why is Russia sending some of its precious gas up in smoke? It could be part of normal operations – or it could be sending a message to Europe.

“The burning flame is very visible, probably indicating that the gas is ready and waiting to flow to Europe,” Rystad wrote in the note.

Standard procedure?

A satellite image from Copernicus shows a gas flare in Portovaya, Russia on August 7, 2022.

The LNG facility at Portovia is slated to open later this year, Rystad said, and flaring often occurs as part of routine safety testing for new plants.

But he added: “The magnitude and duration of this continuous flash is too high to be the only explanation for this.”

“Such a flare-up has never happened in history,” said Senior Analyst, Gas & LNG. By Rystad, for CNN Business, referring to the amount of radiant heat found in the area.

He added: “For the Portovaya LNG facility, such a boom is very impressive.

Henning Gloystein, director of energy, climate and resources at Eurasia Group, told CNN Business that Russia is probably flaring off gas created as a byproduct during oil production.

“In normal times, most of this gas would be fed into the pipeline grid and sold to Europe. Because Russia has cut its supply to Europe so much, the gas initially went into Russian domestic storage. Those are now full, so the gas has nowhere to go, so it’s flaring,” he said.

Operational problems?

Russia may face many problems.

Mark Davies, chief executive of Kepterio, a company that advises on how to flare the gas, said the practice was common throughout Russia.

“I think it’s probably an operational issue that operator Gazprom is struggling with,” he told CNN Business. One explanation could be equipment failure.

But the position raises questions. Gazprom may be transporting the gas from the Yamal gas field to greater distances. The Portovaya plant, Rystad said, when it could be closer to the source.

“The cost of compression and transportation from the Yamal field to the Baltic Sea could create unnecessary losses for Gazprom,” he said.

Managing Russia’s vast gas infrastructure is complex, so the coordination between operators in the choice of a place to burn gas can be poor.

A message to Europe?

Russia may be sending a message to Europe as well.

“[Russia] He may be trying to make a political point. [to Europe] ‘Look, we’ve got this gas, and we’re flaring it, you’re choosing to make it harder to get it to market,’ Davis said.

Rystad started looking at the gas explosions in Portovia after people saw large fires in Finland. In July.

Russia has been involved in a standoff with Europe since invading Ukraine in late February. In recent months, Gazprom has reduced flows through Nord Stream 1 following a dispute with the West over a lost turbine. She has completely cut off gas supplies to other EU countries by ordering “unfriendly” countries to pay for gas in rubles instead of euros or dollars.

‘environmental risk’

The flaring at Portovia is “an environmental disaster,” Rystad said, releasing about 9,000 tons of carbon dioxide each day.

Davies said the hatching could be the production of soot, which is particularly damaging to the Arctic region. Most of the soot ends up on the Arctic ice and absorbs more heat from the sun, which accelerates the melting of the ice.

“Obviously, the flare is not operating at 100% efficiency, and so it’s emitting 80 times more methane as a greenhouse gas than carbon dioxide,” Davis said.

Nadine Schmidt and Mark Thompson contributed reporting.

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