Page 108 - RusRPTDec22

The Polish government takes over Europol Gaz, owner of the Yamal-Europe pipeline section that runs through that country, reports Vedomosti. Gazprom owns 48% of that company, with Poland’s state-owned oil & gas company PGNiG owning 48% and the Polish company Gas-Trading S.A. owning the remaining 4%.
This likely does not change anything – throughput remains zero. The key question here for Gazprom and gas markets is this – will this step cause a restart in Russian gas exports to Europe via the Yamal-Europe? The answer to that is almost certainly ‘no’. On the one hand, such a takeover by the Polish government removes an apparent obstacle to operating the company.
The existing corporate charter requires the consent of BoD members appointed by both PGNiG and Gazprom to take decisions, so Gazprom had an effective blocking stake in the company despite its minority position in ownership. On the other hand, Yamal-Europe has been shut down since spring due to Russian counter-sanctions on Europol Gaz due to disputes over its control, and this event is highly unlikely to spur a reversal of that decision. Note that Gazprom’s share in Europol Gaz is valued at Rb35.4bn (c$580mn) on its YE2021 balance sheet. However, its loss has effectively been a foregone conclusion since spring, not long after the start of the Ukraine crisis.
Russian gas giant Gazprom will pump up to 1bn cubic metres to Azerbaijan until March under a new contract with state oil and gas company SOCAR, , Gazprom said in a statement in its Telegram channel on Friday. Gazprom pumped gas to Azerbaijan in 2000–2006, but the country started ramping up its own production at the Shah Deniz field to export it to Georgia and Turkey. The company restarted pumping to Azerbaijan in 2017–2018, but the country stopped buying Russian gas again in 2019 after the launch of the second stage of Shah Deniz. Gazprom was delivering gas to Azerbaijan from 2000 to 2006 until the launch of the Shah Deniz gas and condensate field and resumed gas supplies in 2017 and 2018. Azerbaijan’s gas supplies to Russia covered the period from 2010 to 2014.
Russian liquefied natural gas (LNG) is no longer being sold at discounts in Asia, indicating fears from buyers over sanctions or reputational damage are subsiding, Bloomberg reported on November 10 citing traders with knowledge of the matter. Sakhalin Energy LLC sold three LNG cargoes for loading in December in the last week at roughly the current market prices, with one at a premium, according to the traders. For comparison, several cargoes were offloaded in September at a deep discount to the spot price at the time. There currently are not any direct sanctions on Russian LNG over the war in Ukraine, with exports actually rising to a near record last month. While some long-time Asian customers, such as Japan and South Korea, stopped buying additional spot shipments from Russia earlier this year, China has boosted purchases.
108 RUSSIA Country Report December 2022 www.intellinews.com