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Gazprom «nearing» European natural gas sales of 205 Bcm

23 October 2018 , 12:00Stuart ElliottNeftegaz.RU462

Russia's Gazprom expects its gas sales to Europe and Turkey to exceed 200 Bcm in 2018 and is closing in on annual sales of 205 Bcm, with the level of supplies now close to the contractual maximum of its customers, according to CEO Alexei Miller, Platts reported.


Russian gas continues to dominate in Europe as domestic production declines, with Miller telling Russian PM Dmitry Medvedev that the continued rise in sales would require a new framework for cooperation with its European partners.


Miller said Gazprom would definitely break last year's record of 194 Bcm in gas sales - both export volumes and sales from its own storage - in the «Far Abroad» (Europe plus Turkey, but not the countries of the former Soviet Union).


«There is no doubt that, at the year's end, we will set a new record for gas deliveries to Europe,» Miller said, according to a transcript of his meeting with Medvedev. «We will exceed the level of 200 Bcm and we are nearing 205 Bcm. That is the maximum annual amount under all of our contractual obligations for supplying gas to Europe,» he said. «Without a doubt, this achievement creates a new frame of reference for further cooperation in the gas sector with our consumers in Europe.»


Electronic auction

On top of its long-term contracts for gas supplies to European clients, Gazprom in September also launched a new sales platform for supplies outside of the long-term contractual model. Total sales on the Electronic Sales Platform (ESP) moved past 700 million cu m last week.


A total of 22 daily auctions have been held since Gazprom Export launched the ESP on September 20, implying an average daily sales volume of around 32 million cu m. No volumes were sold in Friday's auction, however, as sales continue to slow following a strong start to the process in late September and early October.


For Monday's auction, volumes are again being offered for November delivery to the German hubs of NCG and Gaspool, and for December delivery to the Slovakian virtual trading point, Baumgarten (or its alternative Austrian delivery points) and the Waidhaus interconnection point on the border between the Czech Republic and Germany.


Production, storage

To meet growing demand for its gas internationally, Gazprom has boosted its own production and storage stock volumes this year. As of October 18, Gazprom production was up by 24.5 Bcm - or 6.8%. «We are coming close to producing 500 Bcm of gas per year,» Miller said.


Miller also said Gazprom had completed 11 sets of preventive maintenance and repair operations within its Russian gas supply system. A total of 72.2 Bcm of gas has been injected into Russia's underground storage facilities.


«Our potential maximum daily deliverability is at an all-time high of 812.5 million cu m,» Miller said, adding that the level was an improvement of 7.2 million cu m/d over last year.



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