Gazprom Overseas Sales Slip 3.5% in 2019
Gazprom's overseas sales of natural gas were down 3.5% last year, the company said in a report published on February 14, with Germany, Turkey and the UK all taking significantly less than in 2018. Stability in those countries' demand would have ensured higher sales than in 2018.
The supplier’s sales outside Russia – comprising exports and traded volumes – totalled 233.2bn m3 in 2019, down from 241.7bn m3 in 2018 but up from 230.3bn m3 in 2017.
Gazprom experienced some difficulty in its core market Europe last year as a result of rising LNG imports and warmer weather, which eroded some of the gains from coal-to-gas switching and a fall in indigenous supply.
Sales to Germany, the biggest buyer of Russian gas, fell 8.5% to 53.5bn m3, Gazprom reported, while sales in the UK, where the company has a major trading operation, fell 27.6% to 10.3bn m3. The biggest decline came from Turkey, however, with volumes plunging 35.3% to 15.5bn m3. As a result, the country was replaced by Italy as Gazprom’s third biggest customer.
Turkish gas demand floundered last year, as a weaker lira drove up the cost of gas imports. This led to gas-fired power plants winding down operations, and some closing altogether, as they were unable to compete with cheaper sources of electricity. Turkey also began receiving increased supplies of gas from Azerbaijan in mid-2018, following the start of the Southern Gas Corridor.
Gazprom’s total sales in western Europe fell 4.7% to 131.9bn m3, dragged down by lower volumes in Germany and the UK. There were also declines in Italy, Finland, Greece, Switzerland and Denmark, which more than offset growth in Austria, France, the Netherlands and Belgium.
Gazprom’s sales to the rest of Europe, excluding Turkey and former Soviet Union states, were up 14.5% at 43.9bn m3, thanks to higher volumes in Croatia, the Czech Republic, Hungary and Slovakia. Hungarian sales alone shot up 42% to 10.5bn m3.
Sales to ex-Soviet states increased by 2.4% to 36.5bn m3, as a result of gains in Armenia, Kazakhstan and Latvia that countered losses in Azerbaijan, Estonia and Lithuania. Gazprom sold an additional 5.04bn m3 of gas in the form of LNG produced at its Sakhalin Island plant, down 4.8% year on year. It also launched piped sales to China via the Power of Siberia at the start of December, with volumes reaching 328mn m3 by year-end.
Gazprom’s domestic sales also fell last year by 2% to 265.9bn m3, bringing its total supply in Russia and abroad to 499.1bn m3, down 2.8%.