Gazprom Exports to EU Rise Further in April
With the return of cold weather, Russian gas into EU grew slightly (+1.3%) thanks to less gas transiting to Turkey (-8.5%). If March was a 'summer gas' month, April was more a 'winter gas' month.
Gazprom used the Ukrainian route more – up 11.9% in April compared with March – than the Belarussian option (-5%) and direct links (-7.6%), as Russian exports to Italy more than doubled in April.
After Gazprom's record volumes in 2016 in Europe[1] – 178bn m³, up 19.7bn m³ or 12.4% y-o-y – 2017 should see even more Russian gas entering the EU energy mix.
The price attractiveness of Russian, gas that outcompetes US LNG, and the Groningen output cap, are leaving the EU more dependent on Russia. On the other hand, Russia's gas sales to countries beyond the former Soviet Union accounted in 2016 for 48% of Gazprom’s total gas sales and 65% of total net revenue from gas sales and Europe should continue to provide hard currencies for Gazprom’s gas in the future.
This explains why Gazprom wants to build Nord Stream 2 with five EU companies – Engie, OMV, Shell, Uniper and Wintershall – committing April 24 to providing long-term financing for half the total cost of the project estimated at €9.5bn ($10.4bn).
On the foreign policy side, Russia is not an EU friend; but on the energy side Gazprom is the cheapest gas supplier that can, on top, provide any additional gas we may need[2]. With increased inter-dependency, how is Europe’s schizophrenia going to evolve? Stay tuned!
Thierry Bros
Founder thierrybros.com
Advisory Board Member of Natural Gas World