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Gazprom expects to export up to 201.1 Bcm of gas to Europe in 2019

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Gazprom expects to export up to 201.1 Bcm of gas to Europe in 2019

Moscow — Russian gas group Gazprom expects natural gas exports to Europe and Turkey of up to 201.1 Bcm this year, CEO Alexei Miller said Friday.

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Gazprom also expects gas import demand growth in Europe up to 2035 to exceed forecasts, Miller also said.

"Today our forecast for gas pipeline deliveries in 2019 to Europe and Turkey is between 198.6 and 201.1 Bcm," Miller said in a speech at the company's annual general meeting. Gazprom exported 201.9 Bcm to Europe in 2018, accounting for around 36.8% of the market.

"Taking into account the reality that demand for Russian gas has reached a new level, a new height of around 200 Bcm/year, our share on the market is between 35.5 and 37.5%," he said. "Furthermore it is worth nothing that we increased this by 5.4 percentage points in just three years."

Gazprom is also considering increasing volumes of gas supplied for European storage above the current planned level of 11.4 Bcm.

"The target volume for pumping into European storage is not less than 11.4 Bcm. What does 'not less than' mean? If we have the opportunity to pump more, then we will pump more. We will pump as much as we can," Miller said.

Gazprom traditionally fills European storage in the summer, but this year is keen to increase volumes, due to uncertainty over transit via Ukraine next year. The current transit contract is due to expire at the end of 2019 and a new one has yet to be agreed.

Representatives of the EU, Ukraine and Russia are due to meet to discuss the issue in September.

Miller said that under EU law it will not be possible to sign a new contract by the end of the year. He said Gazprom was willing to extend the existing transit contract, but it should be economically worthwhile for Russia.

Earlier Friday Miller said that Gazprom expects gas demand growth in Europe up to 2035 to exceed forecasts.

"Three years ago at the AGM we said that by 2035 demand in Europe for additional gas imports may be 150 Bcm. Today we see that in the last three years alone imports to Europe have increased by 67 Bcm," Miller said.

"We expect that this trend will continue and the reality will exceed forecasts," Miller said, adding that the main drivers behind the growth were declining domestic gas production, declining nuclear power generation and a fall in the role of coal in power generation.

Local media reported that Gazprom expected output to exceed expectations this year, citing deputy chairman of the management committee Vitaly Markelov.

"Last year, Gazprom produced 497.6 Bcm of gas. The plan for this year includes gas production of 495 Bcm...today we have already produced 252.6 Bcm of gas, which is 7.6 Bcm higher than the plan for this period. We expect to exceed the plan by the end of the year," Markelov said, according to the Prime news agency.

Miller said Gazprom planned to purchase around 20 Bcm/year of gas in Central Asia in the near term.

"This year we are planning to buy slightly more than 20 Bcm of Central Asian gas, and in 2020 also slightly more than 20 Bcm. In 2021 we will see, but I think that this figure will be very, very close," Miller said.

-- Rosemary Griffin, rosemary.griffin@spglobal.com

-- Edited by Dan Lalor, daniel.lalor@spglobal.com