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Gazprom on Path to New Reality

Gazprom on Path to New Reality

Many saw the beginning of Vladimir Putin’s new presidential term as a window of opportunity for passing big decisions on restructuring of the gas market. The formation of a new government and media attacks on the Gazprom management were aimed at putting on the political agenda the issue of liberalisation of gas export and divestment of gas pipelines.

The beginning of export from, and accelerated commissioning of the capacities of, the Yamal LNG project and growth in the capitalisation of Novatek triggered a new phase of the fight for Gazprom’s export revenue and production assets. Especially considering that the resources available to the independent producers themselves prevent them even from maintaining gas production within reach of the Unified Gas Supply System, not to mention intensive expansion.

However, radical views on the development of the gas industry are countered by the need to ensure trouble-free gas supply to households and the national economy; Gazprom’s successes in export; and the carrying out of major infrastructure projects from the Baltic Sea to the Black Sea to the Sea of Okhotsk. So the fight continues.

Read about these and other processes in the new NESF report.

The report contains the following sections:

  • Gazprom in the domestic gas market

    • What the ratio between Gazprom and the independents looks like
    • Supply dynamics and change of the Gazprom share
  • Export to Europe: towards a new record

    • It is already obvious that supply to Europe will reach a new all-time high. However, competition is on the rise too. The entire year Europe has discussed the arrival of American LNG and celebrated the completion of the TANAP gas pipeline
  • The problem of Ukraine 2019: is a new transit war possible?

    • This problem will have to be solved in conditions of fierce political fighting in Ukraine itself; increasing pressure of sanctions imposed by the US and UK; and international arbitration.
  • Gazprom’s financial position

    • An investment boom in an era of sanctions
  • A medium-term forecast of developments

Contents of the report:

Introduction 3
Chapter 1. Gazprom in Domestic Gas Market: Independents Slow Down 4
1.1 Gas production within reach of the UGSS: a Gazprom comeback 4
1.2 Is the fight for the domestic market over? 9
1.3 Gazprom’s pricing and incomes of in the domestic market 12
1.4 Exchange trade in gas in Russia 13
Chapter 2. Gas Export by Pipeline: Peak in Europe, Decline in Turkey 17
2.1 Gazprom in the European Union markets: towards new records 18
2.2 Gazprom in the Turkish market: turbulence as the strategic position is consolidated 24
2.3 Gazprom in the former Soviet Union 27
Chapter 3. The problem of Ukraine 2019: is a new transit war possible 34
3.1 Stockholm arbitration decisions on the gas contracts and their implications 34
3.2 Ukrainian transit after 2020 37
Chapter 4. Gazprom’s Eastern Projects: Growth of Power of Siberia 43
4.1 China’s gas hunger 43
4.2 Prospects for developing supply of Russian pipeline gas to China 46
Chapter 5. Gazprom’s Financial Position: Investment Boom in Era of Sanctions 51
5.1. Accelerated income growth 51
5.2. Gazprom’s capital investment and investment programme for 2016 and 2017 53
5.3. Gearing rises but remains reasonable 56
Chapter 6. Medium-term Forecast of Developments 58
Date of release: December 30, 2018

If you are interested to obtain please contact » Elena Kim

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Analytical series “The Fuel and Energy Complex of Russia”:

Outlook for Russian LNG Industry
Russian Energy and West One Year after Ukraine Conflict Began: Are There Connections Still?
Green Agenda in Russia during Bitter Conflict with West
After February 2022 the agenda was radically rewritten. Western companies began leaving Russia en masse, economic relations with the West were drastically reduced, and the Russian economy began to be pushed violently from the global economic space, hemmed in by sweeping sanctions. All that was, to put it mildly, not the best background for talking about ESG. Especially because tasks of survival and stability under unprecedented pressure became the priority in the economy. In late 2022, however, attempts to reanimate the ESG agenda already became obvious. The message is put across insistently that it is important to Russia regardless of the foreign policy situation. While earlier the “green pivot” was seen as an opportunity to attract Western investors and their technological solutions to Russia, now Keynesian reliance on domestic manufacture is discussed.
Oil and Gas Sector Regulation in 2022 and Prospects for 2023
Gazprom at the Forefront of Economic and Political Battles with Europe
Gazprom is being actively thrown out of the market. Its annual supplies to Europe have shrunk from the previous 150 billion to 65 billion cubic metres of gas. European officials assure that they have already learnt how to live without Russian gas, so they will bring its purchases down to but nominal values in 2023. Their main hope is liquefied natural gas. Today the EU must make a crucial decision: whether it has passed the point of no return in gas business with Russia and whether it is certain that its economy will endure without supplies of Russian pipeline gas. Or, on the contrary, Europe will realise after all that the gas balance will not be achieved and the payment for so headlong a rush for LNG will be disproportionate. Assessment of the potential volume of LNG that will appear on the market before the end of the current decade will be the most important factor for making the decision.

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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