Gazprom declares export targets
Russia is working to keep natural-gas exports to western Europe near record levels this year after its biggest supplier, Gazprom, said 2017’s deliveries achieved ambitious expansion targets but the state-run giant is facing competition from US gas exporters.
Gazpom planned to ship a minimum of 180 billion cubic metres during 2018, deputy CEO Alexander Medvedev told the media. That would be the second highest after at least 190 billion cubic metres expected last year, which was a record.
“Of course, it’s business, not sports,” Medvedev added.
Gazprom supplies more than a third of Europe’s demand for natural gas, Russia’s biggest and most profitable market worth some US$37 billion in revenue in 2017.
To counter a recent five-year deal signed between Poland and US liquefied natural gas (LNG) exporters, Moscow said Gazprom could undercut the US in Europe by retailing LNG “at any price”.
The EU has tried to diversify energy supplies away from Russia and pushed for the expansion of ports to handle LNG tankers from the US, where production has boomed. The US could be the largest producer of LNG by the mid-2020s, the International Energy Agency reported.
US natural gas exporters are already invading Gazprom’s long-held European markets, particularly in nations with anti-Russian administrations.
The executive order, approved last week by Russian President Vladimir Putin, allows Gazprom to sell natural gas to firms engaged in the production and export of LNG from this month at an “unregulated price”, Kommersant reported.
The price decree will mainly effect Gazprom’s Baltic LNG and Sakhalin-2 projects. Gazprom has a joint venture with Anglo-Dutch oil giant Shell on the Baltic LNG installation near St Petersburg. The move has been viewed as an attempt to compete with new LNG sites in Lithuania and Poland, both of which have been receiving imports from the Gulf of Mexico.
Meanwhile, Medvedev said the EU should not overreact to the major December 12 explosion in Austria. He said rather than use the incident to criticise over-reliance on Russian fuel, Europe should use the accident to increase reliability.
Energy security depended on how many routes of supply countries had, rather than what state the energy originated from, he added.
Medvedev said as Russian Olympic athletes would compete under a neutral flag in the South Korean Winter Olympics next month, “gas molecules play under a neutral flag”.
“The accident in Baumgarten actually showed how reliable the system is,” Medvedev said. “It took less than a day to recover, and despite the fact that hub prices jumped, none of the consumers were hurt.”
Moscow. Picture credit: Flickr
