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Russia's Gazprom points to 'increased load' on system during maintenance period

Highlights

Winter preparation work 'cannot be paused': Gazprom

August deliveries comparable to normal winter demand

Gazprom production up by 18.1% in year to date

Russia's Gazprom said Aug. 16 that high demand for gas both domestically and abroad in August meant there was an "increased load" on the system during the company's traditional maintenance period.

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In a statement, Gazprom also said that winters in both Russia and Europe were now lasting into March, meaning it needed to prioritize gas storage injections this summer.

This, it said, was "well understood" by its European colleagues.

Gazprom said that supplies in August to the domestic market and to the Far Abroad (Europe and Turkey minus the countries of the former Soviet Union) had reached a "new peak" compared with previous years.

It compared the situation this month to what would be typical in the winter.

This, it said, "means an increased load on the gas supply system during the traditional season of scheduled preventive maintenance and preparation for the autumn-winter period, which cannot be paused."

"The practice of the last few years both in Russia and in Europe suggests that the winter period has also shifted to the spring month of March," it said.

"Therefore, now, in the summer, the priority is to pump gas into underground storage facilities, since the volume of available resources by March must be at a high level for confident passage of this difficult period."

In May, Gazprom said it would build its gas storage stock levels in Russia to a record high 72.64 Bcm this summer ahead of the next heating season.

Gazprom also said it would also increase the maximum daily withdrawal capacity to 847.9 million cu m/d.

The targets are only slightly up on the levels achieved ahead of the past winter, which were 72.32 Bcm and 843.3 million cu m/d, respectively.

Those levels were already record highs, Gazprom said, adding it withdrew a record 60.6 Bcm from its Russian storage sites during the past winter.

That would have left it with just 11.7 Bcm in stock.

2021 deliveries

Gazprom also said Aug. 16 that it produced 316.5 Bcm in the period Jan. 1-Aug. 15, up 18.1% or 48.6 Bcm year on year.

"In absolute terms, this increase is like another winter month -- for example, 47 Bcm of gas were produced in January this year," it said.

Supplies to the Far Abroad totaled 123 Bcm in the first seven and a half months of 2021, close to the historical record of 125 Bcm in the same period in 2018.

"Growth, compared to the same indicator in 2020, is 21.5%, or 21.8 Bcm. For comparison, this is more than the volume of our supplies for all of last year to Italy," it said.

According to S&P Global Platts calculations, the total supply to the Far Abroad in the period Aug. 1-15 was 7.7 Bcm, or an average of 513 million cu m/d.

Sales data from Gazprom includes gas supplied by pipeline and from owned capacity in European gas storage sites.

In 2020, Gazprom's sales in the Far Abroad totaled 175 Bcm and officials have said sales in 2021 would likely be in a range of 175-183 Bcm.

That means Gazprom's supplies to Europe could be flat in 2021 if they come in at the lower end of the forecast range.