Gazprom PJSC, the largest oil supplier of Europe has recently declared that that its ambitions to expand seem to be becoming achievable based o n the deliveries this year and this has prompted many to conclude that the near record highs of the export of natural gas to Europe would be kept up by Russia in 2018.
Deputy Chief Executive Office of the state-controlled gas company Alexander Medvedev said in an interview in St. Petersburg that nest year, it is planning to ship a minimum of 180 billion cubic meters. This year the company expects to ship about 190 billion cubic meters which would be a record, and therefore the planned shipping next year would be the second highest ever.
“Of course, it’s business, not sports,” Medvedev said. Yet, this is “a new stage” in the company’s history.
This year, $37 billion in revenue this year was earned by Russia from exports of natural gas to Europe and over a third of that demand is fulfilled by Gazprom. This trade link between Europe and the Kremlin-backed company is in stark contrast to the political and military discord between Europe and Russia.
Russia has been blamed for intimidating European coastlines and airspace with its warships and planes and of interfering in elections in other countries by officials across Europe. Most recently, warnings of a growing threat to international trade, internet and the Atlantic undersea communications cables by the submarines of Russia were issued by the U.K.’s armed forces.
Politicians and lawmakers at the European Union have been pushing to look to import more natural gas from the U.S. and have therefore been proclaiming further development of its ports to be able to handle liquefied natural gas tankers from the U.S. And according to the International Energy Agency, by the mid-2020s, there are possibilities that the U.S. would become the largest producer of LNG.
A sanctions law passed earlier this year targeting the pipeline project of Gazprom is the main reason that the Russian company has accused the U.S. of politicizing its economic interests in the EU.
Medvedev said that importing gas from Gazprom would become more competitive for Europe because it is anticipated that there would be a fall in the domestic production of gas there and a recovery of coal prices because this region typically decides on gas import on the basis of the weather and economic growth. Any additional demand would potentially be met by Russia, he said.
Medvedev said that because of higher prices of LNG in Latin America and Asia, these regions are the priority markets for the gas especially from the U.S. “This applies to both traditional and new markets — China, India, Pakistan, Bangladesh, Vietnam.”
“A global LNG market still does not exist,” he said. “There are three large regional markets — America, Europe and Asia — with a big price difference. An Asian price premium will stay in place as demand there is booming.”
(Adapted from Bloomberg.com)