Page 144 - RusRPTSept22

The news immediately pushed European spot gas prices above $2,700/mcm. The company claims that the last working compressor needs to conduct its 1,000-hour maintenance check. As a reminder, Nord Stream’s overhauled compressor still sits in Germany, awaiting the resolution of claims and counter-claims on paperwork and resolution on sanctions on future overhauls of turbines by Siemens.
The price is not too relevant if volumes are very low. Currently Russian gas flows to Europe are running at only 25% of typical levels. Nord Stream is only working at 20% of capacity at c33mmcm/d. Transit via Ukraine is at 42mmcm/d, well below contracted levels of 109mmcm/d after Ukraine shut one of two entry points for Russian gas. In addition, the Yamal-Europe pipeline running through Poland is shut down completely due to sanctions and counter-sanctions regarding the ownership of a section of that line. Only flows via Turk Stream and Blue Stream via Turkey are presumably running at normal levels, although direct data on that is not publicly available.
All of these issues are contributing significantly to the record-high gas prices in Europe, but due to the low flows, Gazprom is not enjoying the revenue windfall that might otherwise be expected given market pricing.
BCS GM estimates the company is probably generating just over $200mn/d of gross revenue in its European exports at current export levels, which would be the equivalent of receiving $450mn/d on more typical export flows of 470 mmcm/d. This is still a very respectable level of revenue – only a year ago we would have considered $450/mcm to be a good price – but the record-setting revenue year we were expecting only a few months ago now looks unattainable. Meanwhile, Gazprom now owes the government a near Rb1.25trn one-off tax bill on 3Q22.
● Novatek
Russian gas producer Novatek will order a floating electric power plant from Turkey's Karpowership to replace Baker Hughes and supply power to the first line of the Arctic LNG 2 liquefied natural gas (LNG) plant, business daily Kommersant reported on Wednesday, citing sources. The floating electric power plant has a capacity of about 300–400 megawatts, running on gas-fired engines from Turkey's Karpowership. Baker Hughes earlier discontinued servicing Russian LNG projects, withdrew its engineers from all projects, and stopped equipment delivery to Arctic LNG 2. The sources did not elaborate on the deadline of the floating plant completion but said that the future lines of Arctic LNG 2 could be built with similar power sources.
● Lukoil
Lukoil may repurchase up to $6.3bn of outstanding debt maturing in
144 RUSSIA Country Report September 2022 www.intellinews.com