Russian gas supplies not threatened by U.S. LNG

MILAN, Italy — There’s nothing that will get in the way of Russian gas supplies to Europe, as the partnership Gazprom has with European customers is “logical and natural,” a senior executive said Tuesday.

Gazprom Export’s CEO, Elena Burmistrova, said at the EAGC conference in Italy (attended by Kallanish Energy) U.S. liquefied natural gas (LNG) deliveries are reaching European markets, but aren’t likely to succeed and will, instead, focus on the Asia-Pacific region.

“Gazprom gas is definitely more competitive than U.S. LNG,” the CEO said. “There’s a natural synergy between Gazprom and Europe.”

Burmistrova said Russian gas is the “best choice” for Europe due to its geographic proximity, existing and under construction infrastructure and attractive pricing conditions.

When asked whether U.S. LNG poses a competitive threat in Europe, the executive said LNG terminals in Europe only work at one-third of their capacity.

“Figures are working against these stories … figures explain (Russian gas) is much more competitive,” she said.

Russian gas supplies have been meeting Europe’s needs for over 50 years, through the Cold War and sanctions, Burmistrova noted. Gazprom’s sales to European customers will reach 185 billion cubic meters (Bcm) this year and have been growing faster than the market.

The CEO is “cautiously optimistic” and hopes the gas giant will continue to break previous records and export as much as 190 Bcm to Europe in 2017.

In the first nine months of the year, Gazprom’s exports to Europe increased by 7.3%, or 2.7 Bcm. It currently holds 34% of the gas market in the bloc. Gas imports should increase by 50 Bcm by 2025, she estimated.