Gazprom to Cut Gas Prices and Invest in Europe to Maintain Market Share

Gazprom intends to change its pricing policy and invest in its gas storage capacities to maintain and further increase its position in the European market.

According to a presentation by the Russian company on Tuesday, gas supplies to Europe will increase to 152 bcm in the current year. Gazprom, Russia’s largest company by market capitalisation, foresees an increase in its projected share in the European market from the present 26 percent to 30 percent in 2020 and 32 in 2030.

Reuters reported that the company will cut pipeline gas prices for European buyers this year as a consequence of increased competition.

Alexander Medvedev, Director General of Gazprom Export, said on Tuesday that the Russian company would cooperate with the Italian ENI, French EDF and German Wintershall to diversify its routes. Medvedev referred to South Stream passing through Bulgaria, Serbia, Bosnia and Herzegovina, Croatia, Slovenia and Italy.

Gazprom said it plans to increase its underground gas storage capacities beyond CIS countries to 4.9 bcm of working gas.

Gazprom generates around 55 percent of its gas revenues in Europe. Last year, its proceeds from gas exports to Europe declined by 3 percent to $55.9 billion.