Page 14 - FSUOGM Week 28 2020

FSUOGM PERFORMANCE FSUOGM
Gazprom sells record ESP volumes in June
RUSSIA
Gazprom is trying to offset lower sales under long-term contracts.
RUSSIA’S Gazprom sold a record volume of gas at its electronic sales platform (ESP) in June, as it looks to o set a sharp decline in sales under long-term contracts this year.
Some 4.912bn cubic metres of gas was sold to European customers on the exchange during the month. In May, only 2.6 bcm was sold, versus 2.45 bcm in April.
Gazprom has been selling aggressively on the exchange, as supplies under its oil-indexed contracts have plunged as a result of coronavirus (COVID-19) lockdowns and users switching to cheaper LNG.
e Russian rm also o ered new pricing and delivery terms in June, signing deals for supplies over the next gas year commencing October 1, 2020, priced to a month-ahead price index of the Netherland’s TTF gas hub. e volume sold under these contracts exceeded 1 bcm, Gazprom said.
“ e result of sales with the use of the new instrument proved the market demand for it,” Gazprom Export’s director-general Elena Burmistrova said in a statement. “Even in the current turbulent conditions the ESP keeps growing, o ering new attractive products to its customers.”
ESP sales have fallen in July, averaging just
165mn cubic metres per day as of July 9, com- pared with an average of 245 mcm in June. All of these sales were for longer-term delivery, with no recorded within-day, day-ahead or bal- ance-of-month sales having taken place since May 21. Some 62.6 mcm was gas was sold for August delivery in July 1-9 and 24.2 mcm for September. Meanwhile, 287.8 mcm was sold for fourth-quarter delivery, and 451.5 mcm for win- ter 2020-2021.
Gazprom has seen a greater decline in gas sales in Europe than any other major supplier to the continent. It has lost considerable ground in Turkey in particular, which was previously its biggest gas buyer a er Germany. e country has been cutting back on Russian gas in favour of cheaper LNG imports.
As a result of this decline, Gazprom’s Blue Stream gas pipeline to Turkey, due to resume operations a er maintenance in May, remains idle, Reuters reported on July 9. There is no agreed date for its restart, sources told the news agency.
Gazprom is able to fully supply its Turkish customers using only the TurkStream, whose rst and only operational string can carry up to 15.75 bcm per year of gas.™
POLICY
Naftogaz appointed supplier of last resort for Ukrainian households
UKRAINE
Ukraine is opening up its gas market.
UKRAINE’S state gas monopoly Na ogaz has been selected as the supplier of last resort for the country’s residential gas market, the Ukrainian Energy Minister said on July 9.
A supplier of last resort provides gas to house- holds that are unable to get supplies from else- where, typically a er defaulting on their bills. It is required, under Ukrainian rules, to ful l that role within 60 days of a household losing its pre- vious supplier.
Na ogaz said on July 9 it was taking part in a contest for the position, and its bid has now been approved by a commission specially set up by the energy ministry.
As part of reforms Ukraine is making to its energy market, it is set to open the residential market up to competition. But in line with the EU model, this means a supplier of last resort should be established. Announcing its bid, Naf- togaz said it was “prepared to help the successful launch of the residential gas market.”
“Na ogaz has always taken the reform of the gas market responsibly and believes a supplier
of last resort is one of the essential provisions for the safe launch of the household gas market,” it said. “We are ready to use the maximum of our resources to guarantee that not a single gas con- sumer remains without gas in the event of force majeure circumstances.”
As the supplier of last resort, Na ogaz will charge households UAH2,712 ($100) per 1,000 cubic metres.
Ukraine took another step forward in gas reform last month, with Na ogaz being freed from its obligation to sell gas to retailers for onward supplies to households and district heat- ers. It will now be able to sell the volumes freely at market rates, instead of at a regulated tari .
Ukraine liberalised gas prices for industry years ago but has been slow to apply the same measure to the residential sector, because of political concerns over losing electoral support if gas was sold at free market prices. But the record drop in prices recently has made the removal of subsidised gas prices for households easier to accept. ™
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w w w . N E W S B A S E . c o m Week 28 15•July•2020