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Russian gas exports to decline 16%

in 2020: economy ministry

RUSSIA RUSSIA’S economy ministry expects national Russian gas transits via Ukraine. The disruption
gas exports to slump to 184.5bn cubic metres in did not occur, as Russia and Ukraine were able
Export volumes will 2020, from 220.6 bcm last year, it has said in its to agree an 11th hour deal to cover transit from
recover by 2021, but latest socio-economic forecasts. 2020.
prices will remain The decline comes against a backdrop of Gazprom is also looking to have 72.3 bcm of
subdued for several weaker global demand for gas as a result of coro- gas stored in Russia by the start of the withdrawal
years. navirus (COVID-19) lockdowns and the result- period, Miller said, which is around the same
ing economic fallout. amount it had at the same point last year.
Gazprom has projected that its pipeline sup- “The implementation of all these measures
plies to the EU and other non-CIS states, which will allow Gazprom to fully satisfy all the needs
account for the bulk of Russian gas exports, of our consumers in winter,” the company head
will fall to 170 bcm this year, from 199.3 bcm in said.
2019. The remainder of Russian exports consist The European gas market has been “nor-
of shipments to CIS states and LNG deliveries malising” over recent months after the demand
from Gazprom’s Sakhalin-2 and Novatek’s Yamal destruction caused by the pandemic, he said.
LNG plants. Gazprom’s supplies to non-CIS countries
While 2020 will be a difficult year for Russia’s rebounded 12% month on month in August, he
gas industry, the ministry expects exports to noted.
recover to 220.2 bcm in 2021, almost in line with Gazprom’s European sales will be supported
last year’s level, and soar to 238.4 bcm in 2022 in the remainder of the year by falling prices in
and 240.5 bcm in 2023, it said. its supply contracts. Prices in these contracts are
Prices will remain bearish, however, owing to indexed to Brent oil, but with a time lag, mean-
excess supply and sluggish demand. From $204 ing the sharp fall in the crude benchmark during
per 1,000 cubic metres last year, average Rus- March and April will only be reflected six to nine
sian export prices are forecast by the ministry to months later.
slump to $129.9 in 2020, rising to $153.7 in 2021, The company also sells spot gas on its own
$157.3 in 2022 and $158.4 in 2023. electronic sales platform. Some 40 bcm of gas
Production, according to the ministry, will has been sold on the platform since its launch
decline by 6.5% this year to 690.8 bcm, from 738 two years ago, accounting for over a tenth of
bcm in 2019. It should rebound to 728.4 bcm Gazprom’s total shipments to Europe. Gaz-
in 2021 and surge to over 770 bcm in 2022 and prom has steadily introduced new pricing and
reach 795.6 bcm in 2023, however. delivery options on the platform to boost its
In related news, Gazprom aims to pump 9 appeal.
bcm of gas into underground storage facilities Gazprom also wants to ramp up investments
in Europe ahead of the winter heating period, in gasification in Russia, which is set to reach
its CEO Alexei Miller said on September 16. 71.4% by year-end. It will allocate RUB56bn
Doing so will ensure that the company can meet ($745mn) on bringing gas supply to more con-
increased demand during the colder months, he sumers this year, up from RUB34bn in 2019,
told Russian President Vladimir Putin. Miller said. The funds will be spent on build-
Gazprom’s corresponding target in 2019 was ing 2,350 km of pipelines to provide gas to an
11.4 bcm. That year it stored an unusually large extra 319 settlements, and installing 410 boiler
amount because of the risk of a disruption in units.™

Week 38 24•September•2020 www. NEWSBASE .com P13