“Gazprom” in June has set a record for gas exports

The export of “Gazprom” in the CIS countries in June 2016 has increased compared to 2015 by 5% to 13.4 billion cubic meters, according to calculations of “Interfax” on the basis of the European gas operators. This was the highest figure for June exports for the entire history of Gazprom: the closest in value to the result recorded in the pre-crisis 2008, 12.9 billion cubic meters In the first six months of supply of “Gazprom” in the CIS countries increased by 14.3% to 85 billion cubic meters.

According to the Agency, exports of “Gazprom” is kept at a high level due to the price difference between the cost of gas under long-term contracts by reference to the oil and spot prices. According to estimates Andrei Polishchuk, analyst at Raiffaisenbank, the spot price of gas at the hub in the Netherlands (TTF) with delivery for August is $170 for 1 thousand cubic meters, the British NBV — $140 per 1 thousand cubic meters) Average price gas contracts for delivery in Germany, he estimates at $150 for 1 thousand cubic M. Polishchuk believes the main reason for the growth in gas exports Gazprom’s falling gas prices by 32% compared to last year. The average price for gas “Gazprom” for 2016 is estimated at $169 for 1 thousand cubic meters.

Artem Tip from IK “Opening” also refers to one of the main reasons for the export growth, the fall in gas prices due to the sharp decline in oil prices in the beginning of the code (the price of gas in contracts of “Gazprom” tied to a basket of oil products and decrease followed with a lag of 6-9 months). In January the price of a barrel of Brent crude dropped to $27. Now oil is trading at $47 and 97 per barrel.

Another reason for the growth of gas exports from Russia Exitus calls the anomalous heat in Europe, which increased the consumption of electricity used to operate air conditioners. He also notes that in Europe, the growth in gas demand amid falling domestic production of fuel.

Despite the growth of exports, Gazprom continues to reduce gas production. In January — may of 2016, according to the Ministry, this figure fell by 2.3% compared to the same period last year — to the level of 175.5 billion cubic meters (the share of production of the enterprises of Gazprom in the total volume of production in Russia in January — may amounted to 66.4%). Thus, independent producers and oil companies reduced production by only 0.3% — up to 87.7 billion cubic meters. During the reporting period, gas production in Russia decreased by 1.2% and amounted to 264,2 billion cubic meters. In the materials of economic development it is noted that gas consumption in the domestic market in January — may 2016 was decreased in comparison with the previous year by 0.9% to 204,7 billion cubic meters.