Gazprom’s supplies to Turkey, Europe reach record level

MOSCOW

Gazprom’s supplies have surged by 16 percent to 161.5 billion cubic meters in 2013. Cihan photo

Russia’s state-held energy giant Gazprom, the largest natural gas supplier to Europe, has ramped up exports to the region and Turkey to a record this year due to price reductions and colder weather.

Supplies raised by 16 percent to 161.5 billion cubic meters in 2013, excluding volumes traded by the Moscow-based company’s European units, the export arm of the Russian energy giant said yesterday in an e-mailed statement. 

The previous record was 160 billion cubic meters in 2008, according to the company’s 2012 financial report.

The average price for gas in Gazprom’s European contracts fell by 5.5 percent in 2013 to $380 per 1,000 cubic meters from $402 last year, Gazprom Export also said.

Last year, Gazprom’s exports to Europe fell 7.5 percent year-on-year to 138.8 billion cubic meters. The Russian major gas producer also saw an 8 percent decline in total 2012 gas exports to 203.2 billion cubic meters.

Gazprom’s natural gas supplies to Europe increased in response to the cold weather at the beginning of 2013 and also due to a decline in gas supplies from Algeria, Libya, Nigeria, Norway, Qatar and the U.K.

Gazprom also benefited from Europe’s dwindling supply options, as producers of liquefied natural gas diverted their fuel to Asia, where prices reached a record in February and are higher than in Europe.
European buyers have struggled to find alternatives to Gazprom, whose contracts link prices to oil, generally making it expensive compared to the spot market.

Gazprom covers a quarter of Europe’s gas needs, with more than 150 bcm of exports a year. In response to Europe’s quest for Caspian supply, Gazprom proposed its $39 billion South Stream project, which would pipe gas to northeast Italy through the Black Sea starting at the end of 2015.
Gazprom also clinched a long-term deal last November to export gas to private companies in Turkey.