Page 14 - FSUOGM Week 44

FSUOGM PIPELINES & TRANSPORT FSUOGM

Gazprom continues to boost

exports in October

RUSSIA RUSSIAN gas giant Gazprom's exports to time the company has shown positive monthly
Europe and China rose to 17.5bn cubic metres y/y dynamics this year (the first one was 5% y/y
Gazprom's sales have in October 2020, marking the company's highest growth in August).
picked up over the past ever non-CIS export volume for the month of "Adding 17.5 bcm to the 9M20 non-CIS
months as LNG prices October, Interfax estimates based on industry export figure of 125.7 bcm puts the 10M20
rise and its own prices statistics. export number at 143.2 bcm," the analysts
fall. Gazprom suffered a significant slump in sales continue.
to Europe in the early part of the year, owing Should gas export volumes in November-De-
to warm weather, high levels of gas in storage cember be no lower than the average level for the
and the impact of coronavirus restrictions on last three years (at 37.4 bcm), it would put Gaz-
demand. It also ceded market share to lower-cost prom's non-CIS export volumes above 180 bcm,
LNG suppliers. or 6% above the upper end of the guidance range
Gazprom's sales have picked up over the past provided by the head of Gazprom's export unit
few months, however, prompting the company two weeks ago (165-170 bcm).
to maintain its dividend policy. It also recently "The company's recent performance sup-
said it expected positive cash flow in 2021. ports our view that Gazprom's export guidance
According to Interfax, while Gazprom's is overly conservative this year," Sberbank CIB
export volumes increased, LNG supply to analysts believe, arguing that the combination
Europe decreased by 30% year on year and of better export volumes and better pricing sug-
by 5% month on month to 6 bcm in Octo- gests a stronger financial performance for Gaz-
ber. Global LNG prices have been on the rise prom at the end of this year.
recently, while Gazprom's prices continue However, the resumption of lockdowns in
to fall, reflecting the time lag in oil-indexed Europe could lower the demand for Russian gas
contracts. exports, VTB Capital (VTBC) warns on Novem-
Based on CDU TEK data, Gazprom's gas ber 2.
production expanded by 2% y/y to 42.7 bcm in "Were the continued drop in demand and
the reporting month, making the first instance of spot prices to accelerate, that might present risks
monthly y/y production growth this year. to Gazprom’s full year results," VTBC notes,
"The reported export volume in October while seeing the COVID-related developments
implies 6% growth y/y," Sberbank CIB estimated as generally not supportive for sentiment for
on November 2, noting that this is the second Gazprom. ™

P14 www. NEWSBASE .com Week 44 04•November•2020