The Depoliticization of the European Gas Market
In Energy Post, EWI Senior Fellow Danila Bochkarev argues that policymakers need to keep away from unduly influencing markets and determining the behaviour of energy companies.
Despite uneasy relations between Europe and Moscow, Gazprom’s gas supplies to European consumers are projected to set a new record in 2016. In 2015, this Russian energy company delivered 158.6 billion cubic meters (bcm) to Europe and Turkey. In 2016 this number is set to hit almost 180 bcm—a 12% increase. This number includes exports to all European countries minus three Baltic States plus Turkey. Gazprom’s exports to the EU28 in 2016 are estimated at around 153 bcm. (Global natural gas exports of Gazprom went up from 195.7 bcm in 2015 to 210 bcm in 2016.)
As EU-28 gas demand increased by around 6% to 447 bcm last year, according to figures from Eurogas, this means that the share of Russian gas in Europe consumption went up to around a third. Most of the increase in Europe’s gas imports (around 30 bcm in 2016) was covered by Russia (some 20 bcm).
What these figures show is that EU utilities are not afraid of Gazprom and are eager to buy cheap energy from Russia. Gazprom does not disclose the prices it charges its European clients, only an average price charged for its European customers. Gazprom’s average European gas price was $182.50/1,000 cu m in the first half of 2016, Gazprom’s average price for 2016 is estimated at around $165-$170/1,000 cm.
Read the full commentary here.