Page 144 - RusRPTJun21

Urengoi Achimov and Yamburg Valangian) sufficient to cover the Ust-Luga supply requirements over 2025-40 and beyond. The transportation plan for wet gas includes reconstructing the old Sosnogorsk-Ukhta pipeline and using the new Ukhta-Torzhok pipelines.
The production guidance increase of just 2% is quite positive, as the new target implies 12% y/y growth this year and represents the highest production level in a decade.
The company's positive view on gas output suggests a solid outlook for both export and domestic market supply this year. Gazprom's guidance excludes Gazprom Neft's gas output and affiliates, so the actual production number could be substantially higher.
The comments about the FEED for the Ust-Luga project not having been fully finalized indicate potential risks of the completion of the project being delayed beyond the current target of 2024-25. According to one of the slides in the presentation, the construction of Amur GPP (a project that is comparable in terms of capacity) will take around 10 years (2015-24). The management still seems to be expecting to mainly rely on Nadym-Pur-Taz wet gas production for Ust-Luga rather than on Tambey being developed.
Gazprom European targets remain 175-183bcm and $200-$209/mcm. These targets were communicated at a press conference hosted yesterday by the Head of Gazprom Export, Yelena Burmistrova. In-line with our own forecasts, but conservative. The 175-183bcm compares to the 175bcm shipped in 2020, a time of badly oversupplied European gas markets, while the 183bcm is effectively the upper limit of Gazprom’s current shipment capacities, assuming it does not bid for extra Ukrainian transit volumes beyond its minimum contract requirements (we model 185bcm). Meanwhile, the $200-$209/mcm price forecast compares well to our own $203/mcm. Note however that spot prices have already averaged over $245/mcm and futures markets are robust.
Gazprom ’s and Wintershall DEA’s joint venture, WIAG, has resumed the production of oil in Libya after being idle for ten months last year due to the force majeure in the country, Vedomostireports. It has recently been producing some 43kbbl/d, and might now be producing some 50kbbl/d. The company plans to ramp up operations to 62kbbl/d in 2021. WIAG has operated areas 91 and 107 since 1966.
Gazprom European spot gas price almost reaches $300/kcm , gas level in European underground storages fell in April for the first time in history.
Gas reserves in European underground storages fell in April for the first time in history, Interfax reports, citing data from Gas Infrastructure Europe. Underground gas storages were 30.06% filled on 31 March, but only 29.91% filled on 30 April. The low level of gas injection is mostly due to the strong consumption amid the cold weather in Europe.
144 RUSSIA Country Report June 2021 www.intellinews.com