Page 88 - RusRPTFeb22

an asset has to emit less than 270g of CO2eq per 1kWh and 550kg of CO2eq per kW over 20 years. This news signifies that gas generation in Europe is set to enjoy some level of support for the next decade, along with renewable energy sources, which could help to ensure sustained gas demand. It supports our positive view on Russian gas companies cementing their medium and longer term fundamentals.
The volume of gas in underground gas storage facilities (UGS) in Europe was 26.9% (14.9bcm) below the 2021 level as of the end of January, with 75.9% of the fuel injected in the summer having been taken from storage facilities, Gazprom reports, referring to data from Gas Infrastructure Europe. The level of gas in European UGS continued to decline and at the end of the week was at 41.5% (vs. the historical average of 57%), as persistently high gas prices in Europe push consumers to cover gas needs by using gas from storages, rather than making additional purchases. At the same time, Gazprom is fulfilling its obligations to European consumers. In December, the total volume of gas withdrawn from EU gas storages amounted to 15.6bcm, which is the fourth largest figure since observations began in 2011. At the same time, there have been no drastic changes in the situation in recent days. Hence, we treat the current news as already largely priced in by Gazprom’s shares. To recap, Deputy Prime Minister Alexander Novak said that Russia could supply more gas to Europe, but supplies needed to be made on the basis of long-term contracts. The price of the day ahead futures for the TTF spot index on the ICE Futures now stands at USD 1,057/kcm, which is 0.2% lower than the day before.
Gazprom delivered a record volume of gas to Turkey via the Blue Stream
gas pipeline in 2021 - 15.98 bln cubic meters (bcm). This is the maximum figure since the beginning of the operation of the pipeline, Gazprom Export said
The United Kingdom and the European Union, with the support of the United States, are preparing to impose sanctions against new Russian gas projects in the event that the situation with Ukraine escalates, reports Kommersant, citing the Financial Times. The restrictions being developed would affect the financing of, and transfer of technology to, new gas projects. The new sanctions might also affect several foreign companies, including BP, Total and Shell. We deem the news as slightly negative for sentiment. Were it to materialise, that might complicate the development of new non-conventional gas projects. The FT does not provide much detail on which projects might be affected, but we think that Gazprom’s joint venture Baltic LNG and Novatek’s Arctic LNG-2 might be outside the scope of the discussion, as they are not new projects in the investment sense, with FIDs already taken. Thus, sanctions might affect Novatek’s future projects, but we note that the company already has its own LNG technology, which it is testing out with train 4 of Yamal LNG. The potential LNG projects of Gazprom, YTEK and Rosneft (with its Vostok Oil) and offshore projects could also be affected. However, at this point such projects have not been confirmed or detailed.
88 RUSSIA Country Report February 2022 www.intellinews.com