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Gazprom on Pricing Crest. Current Situation in European Gas Market

Gazprom on Pricing Crest. Current Situation in European Gas Market

Dynamics on the European gas market have become one of the central subjects of the global energy sector development. The situation started getting out of control as far back as summer. After the ordeal of a global lockdown in 2020, the pricing pendulum swung back. Prices for natural gas in Europe broke all-time records, dragging along with them quotations for coal and even oil. The Europeans began to view the situation as a full-scale energy crisis. Meanwhile, the heating season is far from its end.

Gazprom as the largest supplier of natural gas to European markets has found itself to be the focus of a major discussion with the eternal Russian questions: who is to blame and what is to be done.

European politicians accuse the Russian company of attempts to exert pressure on Europe with the aim of speeding up Nord Stream 2 certification. They demand that dependence on Russia for gas be reduced and that more Russian gas be supplied to the markets at the same time.

Gazprom points out that it fully honours its long-term contracts and that it is quite difficult physically to sell gas on the spot market at the current prices. Actual consumers cannot pay for gas at such prices, but prefer to withdraw it from storage.

Also, Gazprom draws attention to an unprecedented rise in demand on the domestic market where it is driven by development of community gas supply, increase in autogas consumption, and natural gas processing projects.

Besides, a boom in demand for natural gas continues in neighbouring China, which promises intensification of talks on co-operation in this area between Moscow and Beijing. Gazprom is trying to respond to the European policy of diversification of suppliers by encouraging competition for its resources.

The unique situation on the European gas market and the one in which Gazprom finds itself are discussed in detail in the new report of the National Energy Security Fund.

You will find in the report answers to the following questions:

What has happened in the EU, UK, and Turkish gas markets in the last ten years

  • Demand and import dynamics

How European administrators have seen the role of natural gas in energy transition and what regulatory practices gas sellers have faced

  • Taxation on the gas business and incentives to renewable energy generation and consumption

Gazprom’s export position in Europe

  • Sales dynamics
  • Gazprom’s shares of key markets
  • Main partners of the Russian corporation

Volume of Gazprom’s long-term contracts

  • Transformation of the pricing system for Russian gas
  • Spot basis versus long-term contracts

Diversification of delivery routes

  • Comparison of old and new export corridors
  • What awaits Nord Stream 2

Situation in the domestic gas market

  • How much gas Gazprom has for export
  • Yearly financial performance of the corporation

Prospects for a new contract with China

Contents of the report:

INTRODUCTION 3
CHAPTER 1. GLOBAL PRICES SOARING. HARD FACTS AND IDLE THEORIES 4
1.1 Role of Gas in EU, United Kingdom & Turkey 4
1.2 EU and UK Gas Balances 12
1.3 Dynamics of Gas Prices in Europe 15
1.4 Perfect Storm 19
1.5 Gas Balance and Prices for Gas in Turkey 25
CHAPTER 2. GAZPROM’S EXPORT POSITION IN EUROPE. SEARCHINGFOR BALANCE 30
2.1 Overview of Gazprom’s Export to Europe and Turkey 30
2.2 Structure of Contracts and Pricing System in Europe 36
2.3 Diversification of Delivery Routes and Gas Supply Security 43
2.4 Gazprom’s Gas Balance 47
CHAPTER 3. LESSONS AND IMPLICATIONS OF PRICING CRISIS 51
3.1 Nord Stream 2 52
3.2 COP26 in Glasgow and Emission-free Gases Directive 53
3.3 Power of Siberia 2 and Processing in Ust-Luga 55
Date of release: February 18, 2022

If you are interested to obtain please contact » Elena Kim

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

Hydrogen Agenda in Russia during Economic War with West
Russian Oil Exports: from Covid-induced Demand Collapse to Sanctions War
State regulation of the oil and gas sector in 2021, 2022 outlook
Gazprom on Pricing Crest. Current Situation in European Gas Market
Oil Tax Policy: Squeezing Last or Chance to Restart Industry?

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

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