Page 4 - FSUOGM Week 46 2021

FSUOGM COMMENTARY FSUOGM

Rosneft gets closer to gaining

access to Gazprom's export

pipelines

Rosneft has been lobbying for years for access to the lucrative European gas market

RUSSIA IT appears that Rosneft is closer than ever before our forecast, and Rosneft’s EBITDA being some
to gaining access to Gazprom’s export pipelines, 4.5% higher (subject to the agent agreement
WHAT: after Russia’s energy ministry publicly threw its payment with Gazprom,” the analysts wrote in
Russia's energy ministry support behind the option. a research note. “While gas prices remain high,
has said it supported While Russian LNG exports are liberalised, investors might underestimate the negative gen-
granting Nord Stream 2 only Gazprom is permitted to use the country’s eral effect on Gazprom’s sentiment from this
export rights to Rosneft. pipeline system to export gas. And the govern- potential development, we believe.”
ment has resisted ending the company’s monop- Rosneft, though mainly focused on oil, has
WHY: oly, because it fears that doing so will result in been working for years to build up its natural gas
The oil company has Russian gas competing with Russian gas over- business, to provide a hedge against oil market
spare gas production seas, reducing revenues. volatility. But it has had difficulty advancing new
capacity, and the In an interview with the Moscow-based Kom- projects as domestic gas prices offer a low return.
European market is tight. mersant newspaper, Russian Energy Minister In a major breakthrough, though, the company
Nikolay Shulginov said his ministry supported finally brought on stream the next phase of its
WHAT NEXT: granting pipeline export rights to Rosneft. The ambitious Rospan development in Western
The development may latter should conclude an agency agreement with Siberia earlier this year, and will soon have some
lead to Rosneft gaining Gazprom, but the ministry will not participate in supply spare.
access to other export negotiations. The company, led by influential oilman Igor
pipelines like Power of “We think that providing Rosneft with gas Sechin, has made its latest lobbying attempt amid
Siberia. export rights would be mostly negative for Gaz- soaring gas prices in Europe as a result of a global
prom, in terms of both sentiment and finances,” energy supply crunch. Depending on regulatory
analysts at VTB Capital (VTBC) said, noting proceedings in the EU, Gazprom may also have
that in the past it had been proposed Rosneft its access to the Nord Stream 2 pipeline capped
could deliver as much as 10 bcm per year of gas at a certain level, meaning some of its capacity
overseas. will be left unused unless other companies like
“Were that to materialise in 2022, that could Rosneft have access to it.
mean Gazprom’s EBITDA being 2.4% lower than Sechin made an appeal to Russian President

P4 www. NEWSBASE .com Week 46 17•November•2021