Page 115 - RusRPTMar21

not increasing exports to Europe, which would traditionally drive up prices. However, US LNG cargoes are expected to reach the continent in mid-February. TTF day ahead prices have ticked up since the start of February from about $223.6/mcm to $258.7/mcm. The first quarter of 2021 is starting much stronger than expected, with demand likely coming in higher and prices likely to be above our previous forecast due to higher spot and Brent prices. Analysts also see some balance coming to the European market. Despite US LNG returning to the continent, underground storage levels are down from their elevated levels in 2020.
The cold weather in Europe and the depletion of European gas and LNG storages have led to gas price increases, but the price growth remains limited by expectations of increasing LNG deliveries to Europe, Kommersant reports. According to the paper, citing the EIA, US LNG plants are currently working at full capacity, producing around 290mcm/d-worth of LNG, and many companies are looking to redirect deliveries to Europe from Asia due to the normalisation of the prices there.
At the same time, Gazprom’s delivery volumes to Europe remain relatively constant. The company is fully utilising the Nord Stream 2 and Yamal-Europe pipelines, deliveries to Slovakia via the Uzhgorod pipeline remain at 67mcm/d, and total deliveries through Ukraine remain within the 124mcm of already booked transit capacity (110mcm/d of capacity under the long-term transit agreement with Ukraine and 14mcm/d additionally booked for February).
On Friday 19 February, the Ministry of Finance announced that it had prepared a draft law addressing taxation, including taxes on the oil industry. The key measures suggested are as follows.
· Threshold diesel and gasoline prices for the damper calculation are to be indexed 1% in 2024.
· Excise rates are to be indexed 4% in 2024.
· For regional projects, the cumulative MET payments are to be
limited by the gross investment into the project.
· Gas produced from the Berezovskaya formation will be subject to a lowering MET coefficient, similar to Touron gas.
In addition, the government made several statements regarding how it sees oil taxation in future.
· MinFin has agreed to transfer highly viscous oil (HVO) to EPT from 2024 and is to provide a proposal on the EPT parameters for it by the end of 2021. The government would like to avoid stopping the development of HVO deposits. At the same time, MinFin does
115 RUSSIA Country Report March 2021 www.intellinews.com