Gazprom pumps up European gas exports to 7-month high

17 March 2022, 02:32 PM

The export of Russian gas to non-CIS countries in March 2022 (according to data for the first half of the month) reached its maximum level over the past seven months.

On average, Gazprom has been exporting about 500 million cubic meters of gas per day. The previous daily peak was in August 2021 (516 million cubic meters), but recently, the state energy corp stepped up its exports, the Russian Interfax news agency reports.

In January 2022, exports averaged 370 million cubic meters per day. In February, this number rose to 430 million cubic meters per day.

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Gazprom itself believes that the reason is the appeal of gas withdrawal under contracts with the Russian monopolist, in comparison with purchases on the spot market. Most of Gazprom's contracts are tied to the month-ahead index, which as of March stands at about $930 per thousand cubic meters. This is almost half the price of the spot market quotes of $1,750 (the average value of a day-ahead contract on the TTF hub) since the beginning of March.

From January 1 to March 15, Russian gas exports to non-CIS countries amounted to 30.7 billion cubic meters, which is 28.5% (12.2 billion cubic meters) less than in the same period of 2021.

Compared to last year, deliveries increased to nine European countries, in particular to Italy – by 51.7%, Poland – by 71.8%, Croatia – by 110.9%, Greece – by 34.6%, Bulgaria – by 24.4%, as well as to Turkey – by 21.1%.

Reportedly, on March 16, Gazprom also reduced the pumping capacity through Ukraine’s gas transmission system from the peak of 109.5 million cubic meters by 13%, to 95 million cubic meters per day.

With the beginning of the Russian invasion of Ukraine, Gazprom sharply increased the pumping of gas through the Ukrainian GTS to the maximum level stipulated by the long-term contract (slightly over 109 million cubic meters per day).

By the end of the day on March 16, spot gas prices at the TTF hub reached $1,180 per thousand cubic meters.

In light of the developments in Ukraine, the European Union and the International Energy Agency have devised a plan to radically curb Europe’s dependence on Russian gas. Ukrainian critics have called Europe’s dependence on Russian gas a betrayal of Ukrainian independence, and have pushed for a cessation of business ties, including fossil fuel ties, with the aggressor nation.

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