Russia's Gazprom has enjoyed a surge in profits so far this year, as strong gas deliveries to Europe, Turkey and China were buoyed by soaring sale prices.
The state-controlled monopoly delivers natural gas to European customers under long-term contracts where the price is understood to be determined by an index of average prices for oil and products.
Gazprom reported that the net price from gas exports to Europe almost tripled to an average of $247 per thousand cubic metres in the third quarter as against $92 per thousand cubic meters in the same period last year, but still far below soaring spot market prices.
The net price reported by Gazprom excludes gas export tax and gas excise taxes paid to the Russian government after its gas is transported outside the country.
Gazprom's gross revenues for the third quarter of 2021 jumped by 70% to 2.73 trillion rubles ($37.1 billion) , with the monopoly posting a net profit of 637 billion rubles in this period, against 8.3 billion rubles in the third quarter of 2020.
Gazprom’s gross revenues from gas exports to Europe rose to over 1.27 trillion rubles in the third quarter, against 484 billion rubles a year earlier.
For the first nine months of this year, Gazprom reported gross revenues of 6.7 trillion rubles, compared with 4.3 trillion last year, and a net income of 1.55 trillion rubles against the loss of 218 billion rubles in the same period of 2020.
Gas exports to Europe, Turkey and China rose by over 21 billion cubic metres to 175.7 Bcm between January and September, the company said.
However, in the third quarter, when European politicians repeatedly asked the monopoly to boost gas exports to the continent to ease the deficit, Gazprom’s total gas exports fell by 1 Bcm to 56 Bcm compared with the second quarter of this year, according to its report.
Deliveries to Europe in the fourth quarter are expected to be even below the level of the third quarter, with a new decline in Russian gas supplies seen at the end of the last week at the Yamal Pipeline, bringing gas from Russia to Germany via Belarus and Poland.
On the up
Gazprom executives told analysts in a conference call on Monday that they expect fourth quarter profits to outshine the third quarter, even though some reduction in gas demand may be possible during the period because of high spot prices.
Executives said they also expect high European gas prices to carry the the company to an even better financial performance in 2022.
Deliveries in the Russian market also increased by 19 Bcm to 170 Bcm between January and September, compared with the same period last year, Gazprom stated.
Gazprom executives confirmed that that boosting reserves in domestic storage was a priority task for the company in the third quarter.
Analysts have questioned this apparent strategy, given that a significant amount of gas that could have been exported as additional to contracted volumes was put into underground storage in Russia instead.
Gazprom has repeatedly denied claims of deliberately under-supplying Europe, stating that all deliveries are conducted in line with existing long-term contracts and actual orders from European customers.
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