Russia Monitor is a review of the most important events related to Russian internal and external security, as well as its foreign policies.
Date: 25 May 2021
Gazprom Is Optimistic About Export Forecasts
The state-run gas company Gazprom outlined its priorities for this year at a series of press conferences before the general meeting of shareholders. The company’s management also shared its export plans. The firm hopes to see a year-on-year increase in its gas sales figures. Interestingly, the company’s top priority is to send gas via pipelines to China. At the same time, Gazprom intends to develop its LNG trading division.
The general meeting of Gazprom’s shareholders will take place on June 25. A press conference was called on May 14 to present the company’s development priorities to be set at the shareholders meeting. On May 18, Gazprom convened a conference to discuss the company’s strategic development and domestic investment projects. The company held another one on May 20, this time to discuss its operations abroad. Gazprom is moderately optimistic about the gas demand in Europe throughout 2021. The company’s underground gas storage facilities are now filled 33.6 percent of their total capacity, which is below the 2015–2020 baseline. The replenishment of gas deposits remains poor amid an unusually cold winter and the company’s decision to redirect some liquefied natural gas into Asia. Gazprom officials claim that the process of replenishing inventories may last longer than until October, prompting high gas prices in the summer. Throughout 2020 Gazprom Export sent 174.89 billion cubic meters (bcm) of natural gas to European countries. Last year the list of its biggest European consumers included Germany (45.8 bcm), Italy (20.8 bcm), Turkey (16.4 bcm), Austria (13.2 bcm), France (12.4 bcm), and the Netherlands (11.8 bcm). In 2020 Gazprom had some 33 percent of the share in the European energy market. This year Gazprom hopes to send into Europe between 175 and 183 bcm of gas. At the same time, Russia is eyeing up better results as it managed to add new directions to its map of energy exports. In January 2020 Gazprom launched gas supplies via the TurkStream pipeline to Turkey and the Balkans. The gas giant is looking to send gas to Hungary via the pipeline in the fall of 2021. Furthermore, construction on the Nord Stream 2 pipeline resumed in December 2020. In light of some latest U.S. decisions, the pipeline will likely be ready this year. The company is also noting the increasing importance of its exports into Asia. In December 2019, Gazprom started pumping gas to China via its Power of Siberia pipeline. In 2020 Russia delivered a total of 4.1 bcm of natural gas to the Chinese market. Works are underway to construct the second and the third line of Power of Siberia. At the same time, Gazprom is quitting its two gas pipeline projects: Iran-Pakistan-India and Sakhalin-Hokkaido, satisfying the demand through LNG supplies. The energy giant is also betting on liquefied natural gas exports. Gazprom also had a “breakthrough” year in 2020 in its LNG trading division as volumes doubled to 7.4 million tons. Furthermore, in 2019 Gazprom traded liquefied natural gas to seven countries while this number doubled in 2020.
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