Gazprom could extend European gas storage injections beyond October: Burmistrova

Russia's Gazprom could continue to inject gas into European storage sites past the traditional end of the injection season in October after it delayed the start of storage injections due to strong European demand, the CEO of Gazprom Export, Elena Burmistrova, said May 20.

Speaking at a press conference, Burmistrova said Gazprom had prioritized meeting direct customer requests for Russian gas during the unseasonably cold weather in Europe this spring.

She also denied that Gazprom was withholding gas from the European market in order to boost prices despite not booking significant additional transit capacity via Ukraine.

"We book capacity in strict compliance with requests from our customers that we deliver to," she said. "In parallel, due to strong demand, we didn't inject into storage -- we delivered to offtakers directly," she said, adding, however, that Gazprom had now started to inject into European storages.

"Traditionally we start injecting in April, but this year we saw withdrawals from storage toward the end of April. Only after that was it possible to begin injections," she said.

"I would not rule out that the injection period will also get longer and go beyond October," she said.

Ukraine capacity

Asked whether Gazprom planned to book additional capacity via Ukraine in the next auction on May 25, Burmistrova said the company "does not disclose this kind of information."

But, she said, Gazprom was meeting "all the requests and needs of our customers."

"Our strategy is not going to change. The key thing is to take care of our commitments and to meet the requests of our customers," she said.

Asked how much gas Gazprom could inject into European storage sites this year, Burmistrova said only: "Just like in previous years, we're going to inject the volumes that will be able to support our supplies."

She declined to give any volume numbers, saying only she hoped the weather would improve across Europe and storage injection pace pick up.

In September last year, Gazprom CEO Alexei Miller said the company planned to inject almost 9 Bcm of gas into European storage sites in preparation for the winter.

Burmistrova also said Gazprom was maintaining its forecast for sales in the Far Abroad (Europe plus Turkey, minus the countries of the former Soviet Union) of 175-183 Bcm first given at its investor day last month.

In 2020, Gazprom's sales in the Far Abroad totaled 175 Bcm, well down on the 199 Bcm from 2019.

Asked whether a previous target of supplying around 200 Bcm/year to the Far Abroad still held, Burmistrova said that given the current market situation, Gazprom preferred to be on the "conservative end of the spectrum."

She said she hoped that with the European economy recovering there could be "some pleasant surprises" in 2021.

ESP sales

Gazprom can also sell additional gas via its Electronic Sales Platform (ESP), but since mid-March has stopped selling gas for near-term delivery, with all sales now only for delivery in 2022.

Asked why it was not selling gas for nearer-term delivery, she said: "We prefer to make an integrated assessment of our portfolio as a whole. Currently our preference is to sell longer-term deliveries through the ESP."

"We analyze the whole portfolio of our contracts and now we understand it makes more economic sense to offer longer delivery times from a financial perspective," she said.

Burmistrova also added that Gazprom continued to forecast for an average European sales price of $200-209/1,000 cu m for 2021 as a whole.

The company's realized European gas price last year was $134/1,000 cu m.

"Our line of thinking is still the same. The low level of storage in Europe is supportive to the price and we do not expect the price will go down in near future," she said.