Page 107 - RusRPTDec22

9.1.1c Gas sector news
The EU has completely replaced Russian gas with liquefied natural gas (LNG) supplies and pipeline gas from other suppliers, European Commissioner for Energy Kadri Simson said on November 23 at a plenary session of the European Parliament. “We have completely replaced gas that is no longer supplied from Russia with LNG or additional pipeline gas from reliable sources,” she said.
The EU countries raised their imports of liquefied natural gas (LNG) from Russia by 42% on the year to 17.8bn cubic meters in January–October, the Financial Times reported on November 29. The bulk of Russia’s LNG went to France, Belgium, Spain, and the Netherlands. At the same time, LNG from Russia accounted for only 16% of seaborne LNG imports by the EU in the period, the newswire reported. A high-ranking US official told reporters in a news conference prior to a visit of French President Emmanuel Macron to the US that Washington was not making a fortune of its LNG exports to the EU, as the US only wanted to help Europe to prepare for the winter. The greater part of US LNG is exported to Europe under transparent long-term contracts with foreign energy traders, the official said.
China, Russia are actively negotiating the Power of Siberia-2 contract,
reports Interfax, based on statements made by Deputy Prime Minister Alexander Novak.
Additionally, a high-level working group between the two countries, the Russian- Chinese Commission on Energy Cooperation, co-chaired by Mr. Novak and Deputy PM of the State Council of China, Han Zheng, will meet in December. Among other things, an intergovernmental agreement to facilitate the already signed, 10bcm/yr Far East contract, which is to provide gas from the Sakhalin-Khabarovsk-Vladivostok pipeline to NE China, is expected to be concluded soon.
Awaiting catalysts, expanded sales of gas to China. The major takeaway here is that work to expand shipments of Russian gas to China continues apace.
We do not have the 50bcm/yr Power of Siberia-2 contract in our Gazprom model – the contract in one form or the other has been under discussion at least since 2004, and disagreements, over price in particular, may delay contract signing indefinitely.
That being said, the situation now looks particularly promising, and we think there is a substantial chance the Power of Siberia-2 contract, including a leg through Mongolia, will be concluded inside our 12-month investment horizon, which would almost certainly act as a material catalyst for Gazprom’s stock.
107 RUSSIA Country Report December 2022 www.intellinews.com