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10 May, 2018 12:35

Russian gas sales to EU hit record high despite the Skripals, election meddling & all that jazz

Russian gas sales to EU hit record high despite the Skripals, election meddling & all that jazz

European countries boosted imports of Russian gas to unprecedented levels in April with overall supplies in 2018 expected to climb above 200 billion cubic meters for the first time ever, ignoring the impact of strained relations.

In the first quarter of this year, Gazprom’s gas deliveries to Europe reportedly increased by 6.6 percent against the same quarter a year ago. The deliveries to European countries kept on growing last month, even after the winter heating season ended.

In April, the Russian energy giant shipped some 15.9 billion cubic meters of gas to non-CIS countries, reports RIA Novosti. The number is seen as record-breaking with shipments reportedly soaring to rates that are unusual for warmer months.

Sales of the Russian gas to Europe reached 70 billion cubic meters from January to April. The high demand for the fuel was triggered by an extreme cold spell as the European states passed through one of the coldest winters over the past decade. Europe continued purchasing higher volumes, even after the winter, to refill gas storage that had been drained during cold months.

Earlier this year, Gazprom’s Deputy Chairman of the Management Committee Aleksandr Medvedev said the energy firm was shipping as much gas to Europe as it usually shipped in winter months. The official added that Gazprom expected demand in summer 2018 to get close to winter levels.

According to rough estimates, the company may sell a record volume of natural gas throughout the entire history of gas exports, including the Soviet period. Gazprom’s gas supplies to European countries hit an all-time high in March, beating a previous record reported by the firm in January 2017.

The recovery of prices for energy products boosted the the country’s energy revenues. According to customs data, Russia’s revenues from natural gas exports in January-March increased by 22.6 percent, to $12.4 billion. The Russian fuel is currently purchased by 30 countries with three quarters of supplies going to the EU.

Apart from the cold winter that evoked low storage levels, Gazprom’s rivals decreased supplies due to various issues at facilities. In April, Norway had to fight with an unplanned outage at the Skarv gas field and Kollsnes processing plant. Russia’s closest competitor had to reduce flows as a compressor at the Skarv field failed. 

Libyan gas failed to reach Italy due to technical issues at the offshore gas field Bahr Essalam, while Algeria had to reduce gas supplies after the European buyers were disappointed with the high prices for the fuel. Unlike Gazprom, the North African state has its prices for gas tied to crude, so surging prices for oil unavoidably push gas bills higher.

Meanwhile, the Russian gas monopoly continues hurdling antitrust barriers to build the Nord Stream 2 pipeline that is aimed at doubling the existing capacity of the Nord Stream pipeline from Russia to Germany. Gazprom also completed the deep-water section of first thread of the Turkish Stream gas pipeline.

Last month, the company said it was ready to build the Nord Stream 3 pipeline, if necessary.

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