Gazprom is currently shipping as much gas to Europe as it typically does in winter months, and expects demand this summer to be close to winter levels, Alexander Medvedev, Deputy Chairman of the Management Committee at the Russian gas giant, told Bloomberg in an interview in Berlin.
The coldest winter in Europe since 2012 depleted storage facilities across the continent that now need to be refilled. Industrial gas-fired power generation increases and economic growth in Europe further boost demand for gas, even if winter is now over and the period is generally a lull in gas demand and markets.
“Minimal historical gas storage levels will mean that summer demand will match winter demand of the not so distant past, given the need to refill the stores,” Medvedev told Bloomberg. “In addition, our gas remains the most cost-competitive,” he added.
Russia supplies around one-third of Europe’s gas and its closest competitor is Norway.
After the cold winter emptied gas storage sites and after the recent rally in oil prices, prices for gas for delivery to the UK next winter have jumped by 8.2 percent since the beginning of this month on ICE Futures Europe in London.
Gazprom gas deliveries to Europe reached an all-time high in March, beating a previous record from January 2017, the Russian company says. In the first quarter of this year, Gazprom’s gas supply to Europe increased by 6.6 percent compared to the same quarter last year.
Gazprom’s gas deliveries to European countries continued to grow in April, even after the winter heating season ended. According to the Russian gas giant, its gas deliveries between January 1 and April 15 rose by 6.3 percent compared to the same period of 2017, with supplies to Austria surging by 74.5 percent, to the Netherlands by 108.9 percent, and to France by 9.5 percent.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- This Discovery Is Changing Solar Energy Forever
- Oil Majors Are Abandoning Venezuela
- A Geopolitical Red Herring For Oil Markets