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Russia Energy Giants in Tussle Over European Share
Russia Energy Giants in Tussle Over European Share

Russia Energy Giants in Tussle Over European Share

Russia Energy Giants in Tussle Over European Share

Russia's Rosneft, the world's top listed oil producer, wants to supply gas in parts of Europe where Gazprom is not present to avoid the risk of losing those markets to US liquefied natural gas, a Rosneft executive said.
Gazprom, the leading global gas producer, enjoys monopoly over gas pipeline exports from Russia. It has lost its exclusive rights to ship seaborne LNG to Rosneft and Novatek, Russia's largest non-state gas producer, Reuters reported.
Rosneft, headed by Igor Sechin, an ally of Russian President Vladimir Putin, has long been vying for pipeline gas exports as it strives to grow globally. It has a memorandum with BP, which owns a 19.75% stake in the Russian company, to trade up to 20 billion cubic meters of gas annually in Europe.
Rosneft Vice President Vlada Rusakova, a former Gazprom executive, said the company wants to conduct "an experiment" in supplying gas to new markets in coordination with Gazprom.
"We are not counting on a total lifting of export restrictions. This would be harmful for Gazprom, especially against the background of a difficult financial and economic situation at the company," she said in emailed comments.
She said that as part of the experiment, Rosneft could supply gas to markets where Gazprom is not present and where US LNG could be imported. Rusakova did not identify any such European countries.
"Of course, this should be done in close coordination with Gazprom in order to avoid competition between Russian gas suppliers," she said.
Gazprom is targeting $32-34 billion in revenue from exporting more than 180 bcm to Europe and Turkey this year. Rosneft produced almost 70 bcm of gas last year, earning $3.5 billion from gas sales at home.
Rosneft, like Novatek, is winning some of Gazprom's clients at home thanks to a more flexible gas pricing policy. It is also eying Asian markets and plans to build an LNG plant in Russia's Far East.
The company wants to export gas to China, where Gazprom plans to start shipping gas in 2019-21 via the Power of Siberia pipeline, currently under construction. It also wants access to China's domestic gas market and end-users via swap deals.

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