Gazprom has no plans to suspend gas purchases from Central Asia, change the timing of investment projects and increase repair programs at key production facilities, as reported by Kommersant.
Analyzing the situation in the gas sector, the publication notes that Gazprom this year can get the lowest gas price in 15 years in its main export market – in Europe. Already, spot quotes have fallen to the level of $ 100 per 1 thousand cubic meters, and oil-linked prices are approaching this level. Demand for gas is also under attack due to quarantine measures, as a result of which Gazprom is threatened with force majeure under a number of contracts.
According to the newspaper, the current situation is comparable only to 2004, when the average price of Brent oil was $ 38.3 per barrel, and organized spot trading in gas in Europe did not exist. Then, the average export price of Gazprom for deliveries to non-CIS countries was at the level of $ 138 per 1,000 cubic meters.
Already, gas supplies to the regions of Central Russia for Gazprom may be more profitable than export to Europe.
Experts fear that as a result of strict quarantine measures due to the coronavirus epidemic, gas consumption may fall to multi-year lows. So, the Italian authorities (the second consumer of Gazprom in the EU after Germany) have already announced the cessation of all industry, except vitally important. According to analysts, European buyers, by analogy with Chinese customers, can declare force majeure due to coronavirus and reduce the volume of purchases. As a result, Gazprom may have to reduce production volumes, cut gas imports from Turkmenistan and Uzbekistan, as well as revise the launch dates of key production investment projects, for example, the Kharasavey field.
In this regard, Kommersant emphasizes that Gazprom informed the publication that the company did not receive reports of force majeure on long-term supply contracts for Europe, did not plan to suspend gas purchases from Central Asia, did not change the timing of investment projects, and did not going to increase repair programs in key industries.