Gazprom's Pumping Gas to Europe Like It's Winter Already

(Bloomberg) -- The world’s biggest exporter of natural gas is turning up the taps to Europe.

After the coldest winter since 2012, storage sites from Austria to the Netherlands are depleted and levels on the continent are at their lowest in at least a decade. That has Russia’s Gazprom PJSC smelling an opportunity.

The Moscow-based company is shipping as much as 580 million cubic meters a day - volumes comparable with winter supplies when heating demand soars, its Deputy Chief Executive Officer Alexander Medvedev said in an interview in Berlin. Increased gas-fired generation and economic growth in Europe also support a strong appetite for Russian gas, he said.

“Minimal historical gas storage levels will mean that summer demand will match winter demand of the not so distant past, given the need to refill the stores,” Medvedev said. “In addition, our gas remains the most cost-competitive.”

Norway is the biggest competitor to Russian fuel in Europe, although exports slumped 7 percent since the start of this month. Liquefied natural gas shipments are also gaining market share as energy hungry consumers in Asia slowed purchases at the end of winter.

Jean-Marie Dauger, president of GIIGNL, the International Group of LNG Importers, said this week in Berlin that summer LNG demand may beat last year’s levels.

Concerns over low storage levels and stronger crude oil prices have already shaken a market that traditionally enters a summer lull once the winter is over. U.K. gas for next winter delivery in the U.K. has climbed 8.2 percent since the start of April on ICE Futures Europe in London.

©2018 Bloomberg L.P.

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