Gazprom Seeks European Cooperation on Gas

Russian gas export monopoly Gazprom Export cannot manipulate European gas hub prices or the oil price gas, CEO Elena Burmistrova told the Flame Conference in Amsterdam May 9.

She said market regulation would stop it from dumping gas if it wanted to engage in a price war with US LNG: "We cannot be the Saudi Arabia of gas and market share is not a goal in itself." 

As well as spot trading and long-term contracts the company has been auctioning gas on six-month contracts, and she said that there may be more this year too.

She also said that a third of the European gas market was its target market size, and that she doubted if the European Commission would be happy if it had more than that. "Competition is good for all. It keeps us in good shape," she said, and consumers also benefited. Last year had been a record for Russian gas exports, particularly to the power sector, owing to a poorer coal-to-power spread, and nuclear generation problems in France. She did not comment in her presentation on the response to its proposals to end the anti-monopoly probe, which the EC has been consulting on. 

Gazprom Export CEO Elena Burmistrova (Photo credit: Gazprom)

She also stressed – on the 50th anniversary of Russia's exports to Europe starting up – the mutual dependence of the European Union and Gazprom, and the need to ensure that gas should defend its market share.

Gazprom has moved the pricing of more than half of its gas exports to hub indexation, although the existence of oil-based contracts influences the market.

So far, most US LNG has gone to higher-paying regions including the Middle East, Mexico, Asia and Latin America, according to publicly available data. "We were surprised by how little LNG came," she said, speaking of European LNG imports in general, and US LNG in particular.

William Powell

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