Russian officials have apparently sided with Rosneft — its largest oil producer — in its attempt to obtain throughput capacity in the Gazprom-owned subsea gas export pipeline Nord Stream 2, which is expected to be commissioned in the fourth quarter.
Moscow business daily Kommersant quoted a letter from Deputy Prime Minister Alexander Novak to President Vladimir Putin as saying that Rosneft may be permitted to start “experimental gas pipeline shipments” to Europe.
However, Novak added that Gazprom will act as an agent for Rosneft in such sales to avoid amending existing legislation that limits pipeline gas exports from Russia solely to Gazprom and its subsidiaries.
Rosneft has repeatedly attempted to win access to the Gazprom-owned and operated gas export network in recent years, targeting its export pipelines in East Siberia and Sakhalin, but the authorities have never supported the oil producer.
Rosneft executive chairman Igor Sechin earlier told Putin that up to 10 billion cubic metres of gas for Europe may be sourced annually from several of its greenfields in the Yamal-Nenets region in West Siberia.
These deposits are operated by Rosneft subsidiary Rospan and Kharampurneftegaz, its joint venture with UK major BP.
More tax promised
Novak and the finance ministry also reportedly like Rosneft’s argument that it will pay three times more in Russian taxes than Gazprom from its gas exports to Europe.
Sechin reportedly promised to the president that Rosneft’s gas will be sold on the European spot market where prices have been hovering between $800 and $1000 per thousand cubic metres recently.
Earlier, Gazprom executives said that because the monopoly supplies gas to European customers under long-term contracts with the price linked to a basket of oil and products, they expect their average selling price to Europe to top just $270 per thousand cubic metres this year.
Novak has suggested the energy and finance ministries might join forces to propose amendments to the country’s tax laws to create a legal framework to implement Rosneft’s generous tax offer.
However, Novak also noted that Gazprom remains firmly opposed to granting export pipeline access to Rosneft and warns that European spot prices may decline rapidly next year, thus erasing projected higher budget revenues from Rosneft’s gas exports.
The Russian gas giant has been under the spotlight over the past two months after it refused to increase exports to Europe above contracted levels to boost reserves in underground storage to meet rising demand.
Scary winter outlook
Gazprom executive board chairman Alexei Miller noted that European storage facilities are facing a shortfall of almost 23 Bcm of gas ahead of the upcoming winter, and that this is unlikely to be replenished.
Gazprom has been diverting gas supplies from Europe to Turkey, one of a few Russian allies in the international arena.
According to the company, between 1 January and 19 September, Russian gas exports to Turkey increased by 12.3 Bcm to 20.3 Bcm compared with the same period last year.
At the end of August, Gazprom executives said they expect the company’s gas exports to Europe to grow by just 6 Bcm, to 183 Bcm, for the whole of this year.
For October, Gazprom has reportedly booked just one-third of the nameplate capacity of the Yamal Pipeline, running to Germany across Belarus and Poland, despite ongoing uncertainty in Nord Stream 2’s certification in Germany to enable its start-up.
Additionally, the monopoly has ignored an invitation from Ukraine to reserve an additional transmission capacity of 15 million cubic metres per day of gas across the country to Europe for next month.
Miller has denied accusations from some members of the European Parliament about supposed manipulation of the gas price crunch on the continent, pointing to similar record high prices in regions, including in Asia, where Gazprom has no direct pipeline access.
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