A Review of the Nigerian Energy Industry

Gazprom grabs record share of Europe gas market despite challenges

Gazprom grabs record share of Europe gas market despite challenges27 February 2019, Moscow — Russia’s Gazprom increased its share of the European gas market last year despite a rising challenge from imports of U.S. liquefied natural gas (LNG), company officials told investors in Hong Kong on Tuesday.

The meeting came a day after the surprise departure of deputy chief executive Alexander Medvedev who has spearheaded Gazprom’s export efforts for the past 16 years.

Gazprom’s share of the European gas market rose to a record high 36.7 percent last year from 34.7 percent in 2017, the company said.

This, despite calls from the European Commission for EU states to diversify away from Russian energy in the wake of Moscow’s annexation of Crimea in 2014.

Gazprom has also faced a rise in imports of U.S. LNG into Europe, which saw a near fivefold increase this winter.

“Our main priorities for the European markets are keeping – and maybe a limited increase – of our share,” Elena Burmistrova, head of exporting arm Gazprom Export, said at the Hong Kong presentation which was webcast.

Also Read: Chevron’s Gorgon LNG export plant train 3 in Australia back online -sources

The company would aim to retain a market share in Europe of no less than 35 percent in coming years, she said. Europe accounts for around two-thirds of Gazprom’s gas sales.

Gazprom’s average gas price in Europe was $245.50 per 1,000 cubic metres last year and it expects a price of $230-$250 this year, Burmistrova said.

RIVALRY AT HOME

In Russia, Gazprom competes with oil producer Rosneft and private gas firm Novatek. Both have long lobbied for the right to export gas by pipeline but for now are limited to LNG sales.

On Tuesday, Novatek boss Leonid Mikhelson met Russian President Vladimir Putin, telling him that Novatek plans to raise its 2030 LNG output target to 70 million tonnes from 57 million in a year or two – putting it on par with top producer Qatar.

Novatek last year launched its $27 billion Yamal LNG plant, which can produce 16.5 million tonnes of LNG per year.

As for Gazprom, it plans to build a third line at its Sakhalin-2 plant in Russia’s Far East in 2023-2024, Burmistrova said.

The company is looking to account for 25 percent of China’s gas imports by 2035, a management committee member told the investors in Hong Kong.

Also Read: U.S. energy company Anadarko says worker killed in Mozambique attack

It plans to supply China via the 38 billion cubic metres (bcm) per year Power of Siberia pipeline. China is set to become Gazprom’s second largest market after Germany, where it sold a record 53.4 bcm of gas last year.

Like and follow on facebook & twitter

Reuters

In this article

Join the Conversation

Join the Conversation