“Gazprom” declared the absence of competitors in Europe

Photo: Ekaterina Kuzmina/RBC

The Russian gas has no competitors on price in Europe, said the Chairman of “Gazprom” Alexander Medvedev. The price of “Gazprom” on 20% lower than at European hubs, it follows from the calculations Bloomberg

“In Europe, are not fools, they know how to use kulkulyatorom to count, to force them to buy expensive <…> is impossible. Our gas, especially given the devaluation of the currency in emphasis does not see competitors”, said Monday on a press-conferences the Chairman of Board “Gazprom” Alexander Medvedev. He was commenting on reports that the United States began shipments of liquefied natural gas (LNG) to Europe. According to him, none of the tanker with LNG to the us in Europe never arrived.

In 2015, Gazprom increased its gas supplies to Europe by 8.2% (of 158.6 billion cubic meters) increased its share on the European gas market from 30% to 31% — the highest level in ten years. The company estimates that in 2015 gas consumption in Europe increased from 484,4 billion to 510,8 billion cubic meters of Own production decreased by 2% to 258.8 billion cubic meters (mostly through the Netherlands), while imports rose by 13.9% to 252 billion cubic meters And more than all manufacturers increased deliveries of “Gazprom” (by 8,2% to of 158.6 billion cubic meters). While shipments from Algeria, by contrast, declined by 10% to 36.4 billion cubic meters and Qatar increased slightly — from 23.5 billion to 27 billion cubic meters.

The Russian company still plans to save more than 30% of the European market by 2035, said in its February presentation.

Last week, Bloomberg reported that the price of Russian natural gas in Europe fell to the lowest level since September 2004 and is now approximately 20% below European spot (market) prices of gas. As an indicative indicator the Agency uses the average price of Russian gas on the border with Germany, in may it was $3.99 for 1 million British thermal units (BTU, equivalent to $142,5 per 1 thousand cubic meters), follows from the data of IMF. The cost of gas futures on the British NBP hub (a leading indicator for the European spot gas market with delivery in July on Monday amounted to £3,2 per 1 million BTU, or $4,66 (data exchange ICE Futures Europe). This is 17% more expensive than Russian gas at the border with Germany.

Responding to the publication Bloomberg, Medvedev on Monday stressed that “Gazprom” is not engaged in predatory pricing and gives discounts in Europe. He recalled that the export portfolio of “Gazprom” consists of several types of contract — “spot clean binding” (prices depend on the spot), “hybrid bound” (binding to the spot and the price of petroleum products) and with pure oil product binding.” The halving in oil prices affected the oil production component of the contracts, “Gazprom”, the spot prices also fell for a year from February 2015, he added. But the contract prices of “Gazprom” will change depending on spot and oil products with a lag of six to nine months.

In late may, Medvedev told reporters that in 2016 the average price of Russian gas in Europe will amount to $167-171 per 1 thousand cubic meters. m compared with $243 for last year that is largely due to the binding contract prices of “Gazprom” to oil quotations.

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