Gazprom's H1 2018 natural gas exports to Europe, Turkey at record 100.6 Bcm

Moscow — Gazprom's exports of natural gas to Europe and Turkey in the first half of the year exceeded 100 Bcm for the H1 period for the first time ever, it said late Tuesday in a second-quarter results report.

The Russian state-owned company exported 100.642 Bcm of gas to Europe and Turkey in January-June, up by 6.5% on the year and accounting for around 40% of its total output of 253 Bcm for the period, which was up 8.7%.

Exports to Western Europe alone, where demand exceeded contractual obligations during the cold winter months, rose by 6.4% on the year to 81.6 Bcm in the period.

Gazprom's largest consumer, Germany, boosted imports by 12.5% on the year to 29.596 Bcm in H1, while Austria and the Netherlands showed even sharper rises, of 54% and 67% respectively.

Demand widely exceeded contractual obligations especially in Germany and the UK, even though the latter actually reduced imports by 15% on the year. Belgium, which has no supply contract with Gazprom, received nearly 0.5 Bcm in the first half of this year.

"By this time, the systematic mistake in the reevaluation of gas demand in Europe is being corrected. Growth in gas demand in 2016 and 2017, which exceeded the increase in contract obligations has led to the situation of insufficiency of contracted volumes," the company said in the report, adding that only 95% of European gas demand is secured by contracts at the moment.

The company's exports continued to rise year-on-year in July, Gazprom said earlier this month. It said Germany raised imports by 12.3% in the month, Austria by 48.3%, the Netherlands by 53.8%, France by 11.8%, Croatia by 40.1%, Denmark by 11.9% and Poland by 6.6% year on year. It did not give total volumes.

In the full year 2018, the company could set a new all-time record for gas exports of more than 200 Bcm, up from 194.4 Bcm exported to Europe and Turkey last year, Gazprom's officials said in late June, citing economic growth and declining gas production in Europe.

Outside of Europe, Gazprom's gas exports to the former Soviet Union states rose by 6% year on year in January-June, mainly driven by supplies to Azerbajian, which resumed in November 2017, as well as a 29% year-on-year increase in exports to Kazakhstan.

The company's LNG deliveries to international markets rose to 1.87 Bcm in H1, up 17.2% on the year, it said.

Gazprom sales to all pipeline markets in H1 2018 vs H1 2017 (Bcm):

* Technical volumes supplied to ensure transit to Europe via Ukraine
Source: Gazprom

--Nastassia Astrasheuskaya, nastia.astrasheuska@spglobal.com

--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com