Page 128 - RusRPTApr21

2020. While the agreements with Orlen and Lotos are among the largest standalone contracts for Rosneft, we do not think the company will face any difficulty finding buyers for its crude oil. Hence, we treat the news as not market-moving for Rosneft.
Gazprom utilization of European storages falls to 33%, the lowest in two years. The level of utilisation of European underground gas storages fell to 33%, the lowest in the past two years, Vedomosti reported on March 11.
Lifting of gas might continue until the end of March, which could potentially bring the amount of gas lower still by the start of the injection season.
At the beginning of March, the rate at, which gas was lifted from storages accelerated. As a result, spot gas prices in Europe reached $220/kcm as of March 11 (although Gazprom stated that it was currently lifting gas for deliveries on long-term contracts, which does not have an effect on spot prices).
Separately, the Federal Customs Service reported that Gazprom’s export price in January was $170/kcm, up from $157/kcm in December, although below TTF in January ($258/kcm).
The situation on the European gas market largely remains favourable for gas deliveries, and this has been acknowledged by the market, in our view.
According to Bloomberg, LNG supplies to Europe have grown more than 50% in March to date, compared with the beginning of February. Gazprom has also increased supplies, and has increased the utilisation of the booked capacity of the Ukrainian route.
The low amount of gas in European storage could potentially support gas demand throughout the year, as gas stocks are rebuilt. We forecast Gazprom’s average realised gas price at $213/kcm in 2021F, based on our European gas price forecast of $221/kcm. Overall, we see the news as supportive for Gazprom. We note that the price reported by the FCS usually differs from that reported by Gazprom (the latter was greater in 3Q20). Therefore, we treat this information as neutral.
Gazprom increased its non-FSU exports 28% y/y to 4.9bcm during the period from 1 January to 15 March, Interfax reported March15, citing company data.
Exports to Germany (+28.7% y/y), Turkey (+80.5% y/y), Finland (+74.2% y/y), Serbia (+61.5% y/y), Romania, (+77.7% y/y), Bulgaria (+52.1% y/y) and Greece (+24.5% y/y) were all up during the period.
128 RUSSIA Country Report April 2021 www.intellinews.com