Photo: Denis Sinyakov / Reuters
The Russian company “Gazprom” has hit the competitors in Europe, selling cheap gas. About this “Vedomosti”.
Raw material prices in the main export market of Gazprom gradually fall after a warm winter, against the inflow of liquefied natural gas (LNG), including from the US, and fears of falling demand for raw materials in the year 2020 due to the coronavirus. So, Europe has completed the winter of 2019-2020 with warehouses filled to 55.5 percent. This is the highest level for all history of observations. In some years, this level of occupancy before the beginning of the winter season.
The cost of 1 thousand cubic meters of gas for the month ahead on the Dutch hub Title Transfer Facility more than a week holding near $ 90, and on March 25 it drops to 86 dollars. It is known that the budget “Gazprom” was imposed on the basis of the forecast of the average cost of export of raw materials is $ 200 for 1 thousand cubic meters.
Due to the fall in spot prices, it was expected that the company will reduce the sale of gas through its own European electronic trading platform (ETP). However, “Gazprom”, on the contrary, increased them. From the beginning of 2020 through the area, the company has sold more than 8.6 billion cubic meters of gas, including nearly 2.4 billion cubic meters since the beginning of March. For comparison, all of 2019, the company sold through ETP 14.1 billion cubic meters.
The average price of sales on the platform fell to the lowest level in the history of the platform 113 USD per 1 thousand cubic meters. A year ago the cost of raw materials was above 200 dollars. Also changed the sales structure from the point of view of delivery time. In January-February 2020 “Gazprom” sold 80 percent of the volume of raw materials through auctions with delivery term not later than the next month, and now about 70 percent of the supply for two months or more, including for the fourth quarter of 2020, and even in 2021.
According to analysts, Gazprom is concerned that the period of low gas prices will be delayed and thus tries to maximize sales to ensure sales volumes. According to the head of Department of structurization of contracts and pricing, OOO “Gazprom export” Sergey Komlev, who quoted the corporate publication Gazprom, in low price from LNG producers have an incentive to maximally postpone the launch date of the new facilities.
Video, photo All from Russia.