Page 89 - RusRPTApr19

output 5.2%. Although Surgutneftegas posted crude production cut in line with its peers in February, since October crude output at the company’s fields has even slightly increased (up 0.4%),” VTBC said.
Gazprom’s gas production declined slightly m/m in February (-0.3% m/m) along with weaker gas exports to Europe (-13% y/y). Novatek’s consolidated gas production (including its share in joint ventures) increased 17.1% y/y, thanks to the contribution from Yamal LNG (more than tripled gas production at the field compared with February 2018, +31.5% m/m) and higher production at Arcticgas (+1.9% y/y).
Gazprom's head Alexey Miller earlier said that the company increased its gas output by 5.4% to 497.6bn cubic metres (cm) in 2018, and gas export by 3.4% to 201bn cm. Gazprom expects gas exports to Europe at 200bn cm in 2019, the company says.
Gazprom may increase its output by 80bn-115bn cm by 2035 thanks to developing projects in new regions, board member Oleg Aksyutin said on February 26. But most of the increase will be going to China as the new Power of Siberia pipeline comes online at the end of this year.
Gazprom estimates that its share of the European gas market grew to 36.7% in 2018, from 34.2% in 2017, amid lower production in the region. At the same time Gazprom's average gas price grew by 24.6% in 2018 and reached $245.5 for 1,000 cm. The company expects natural gas prices in Europe this year to average $230-250/kcm.
IEA expects US oil output to grow by 1.5mmbd y/y in 2019, meaning 2018’s average crude production of 10.96mmbd will rise to 12.46mmbd. However, the latest output reported by EIA was 12mmbd, while global inventories were falling. Therefore, even if US crude production reaches 12.9mmbd by YE19 amid projected demand growth of 1.4mmbd (in 3Q19), this will not be enough to balance the market. Hence, if OPEC agrees to extend the deal this weekend, the global supply will exceed global demand.
Nord Stream 2 AG, the company operating the Nord Stream 2 pipeline of Russian gas giant Gazprom, said on March 28 that Denmark asked for an option to change the pipeline's route and lay it in the country's exclusive economic zone located to the south of Bornholm island. Denmark remains the only country that has not given permission for the pipeline, and the suggested route is the third alternative route. The previous two have neither been rejected nor approved by Denmark so far. According to the sources of Kommersant daily, the ecological evaluation of the new route could take 3-6 months, endangering Nord Stream timely construction, suggesting that Denmark's initiative was purely political. "While suggestion looks like an attempt to prolong NS-2 construction, it is unlikely to cause significant delay, given German support, permission from other countries and 2 alternative routes suggested by NS-2 AG," BCS Global Markets commented on March 28.
The group building the Nord Stream 2 pipeline to import Russian gas into Germany is exploring plans to hive off its last 50 kilometers into a separate company, a move that would undermine E.U. plans to regulate the entire US $9.5bn project, the Financial Times reported on Thursday. Under the proposal, a new company would own and manage the small part of the undersea pipeline within German territorial waters. While this section would be subject to E.U. rules, the rest of Nord Stream 2 — nearly 1,200 kilometers through the Baltic Sea — would remain outside the bloc’s jurisdiction,
89 RUSSIA Country Report April 2019 www.intellinews.com