Tag Archives: Russian gas price

Russian gas export price up in Dec, but Jan 2022 likely to slide to sub $500/mcm

  • Based on the Russian customs data released on February 7, the weighted-average price of Russian-origin gas to all export destinations (exc. China was $517 per 1,000 cubic meters (mcm) in December 2021, compared to our forecast of $580/mcm.
  • Based on customs data, we estimate that the price for Russian gas in Europe only (excluding FSU, Turkey and ESP sales) was $711/mcm in December. This is at a 28% discount to the average price of TTF December futures of $1,005/mcm. While the majority of Russian contract prices is linked to TTF futures, some of the contracts might be based on long-term/fixed prices, which explains discounts to hub prices.
  • Our pricing model shows that the weighted average price of Russian-origin gas to all destinations (exc. China) in January 2022 declined 8% MoM to $475/mcm and export volumes fell 20.9% MoM to 12.7 bcm. The fall in price is on the back of higher proportion of sales to FSU and Turkey, where prices are below the European level. Russian customs will report the relevant data in early March.
Gas-price_Dec21_customs_7Feb22_FINALDownload
  • The Russian gas price to European customers is estimated at $749/mcm, at a 46% discount to the average price of January TTF futures ($1,392/mcm) and 25% discount to TTF average spot price for January 2022 ($1,005/mcm).
  • This means that some Gazprom customers in Europe were buying Russian gas at a deep discount to headline hub prices. At the same time, Russian gas contracts with prices linked to next-month futures (est. 21% of total export to Europe in January) would have been more expensive ($1,392/mcm) than spot volumes in January ($1,005/mcm).

In the first week of February, the average price of TTF next-day futures ($935/mcm) has been below Russian contract prices based on dated futures ($1,002-$1,375/mcm). At the same time, Russia gas export to Europe (exc. Turkey and Ukraine) was up 24% MoM to 312 mn cu m/d (1-5 February), up from 251 mn cu m/d on average in January.

Russian-origin gas price to all export markets at $503 in November, export to Europe drops by 29% YoY

  • The weighted-average price of Russian-origin gas to Europe, Turkey and the Former Soviet Union (FSU) was $503 per 1,000 cubic meters (mcm) in November, compared to our forecast of $511/mcm. This is based on the Russian customs data, released on January 14. It does not include sales to China.
  • Russian customs report the total value of Russian-origin gas shipped across the border. We work out average prices paid for Russian gas by customers in the FSU, Europe and Turkey. 
  • We estimate that Russian gas price to Europe only (excluding FSU, Turkey and ESP sales) was $668/mcm in November. This is at a 39% discount to the average price of TTF November futures of $1,112/mcm.
  • Based on our pricing model, the weighted average price of Russian-origin gas to all destinations (Europe, Turkey and the Former Soviet Union) in December was $580/mcm. The Russian gas price to Europe only (excluding FSU, Turkey and ESP sales) is estimated at $855/mcm, at a 14% discount to the average price of December TTF futures ($1,001/mcm) and 38% discount to TTF average spot price for December. 
  • We estimate that Russian gas export to FSU, Europe, Turkey and China was 16.08 bcm in November 2021, down 22% YoY. This is based on various data points released by Russian customs and Gazprom. Detailed data for November with a breakdown of gas export by country is yet to be published by the Russian customs. However, the preliminary numbers indicate that Russian-origin gas export to Europe was down 29% YoY in November.
Gas-price_Nov21_customs_SHORT_14Jan22_FINALDownload

Russian-origin gas price to Europe in October and other stats

  • The weighted-average price of Russian-origin gas to Europe, Turkey and the Former Soviet Union (FSU) was $444/mcm in October. This is based on the Russian customs data, released on December 13.
  • Adjusted price to Europe only (excluding FSU, Turkey and ESP sales) was $556/mcm, according to our estimates. This is at a 31% discount to average price of TTF October futures.
  • In the first ten months of the year, the total volume of Russian-origin gas sold to Europe, Turkey and China was 144 bcm (473 mn cu m/d) , up 8.5% YoY. However, in October, export volumes fell 27% YoY to 11.8 bcm (381 mn cu m/d) in our estimates. Shipments of Russian-origin gas to Germany, Netherlands and Austria dropped sharply YoY. This may be partially explained by high demand from domestic consumers and, unusually, net injections into Russian storage in October.
  • Total gas exports by Gazprom to Europe, Turkey and China rose 10.9% YoY to 158.8 bcm (521 mn cu m/d) in the first 10 months of the year, according to Gazprom. Additional 15.7 bcm of gas sold by Gazprom was mostly of Russian origin (up 10 bcm YoY) with an increase in net sales from European gas storage and a small YoY decline in sales volumes of Central Asian gas, in our estimates.
  • Based on our pricing model, the weighted average price of Russian-origin gas to Europe, Turkey and the Former Soviet Union in November was $511/mcm. The Russian gas price to Europe only (excluding FSU, Turkey and ESP sales) is estimated at $660/mcm, at a 40% discount to the closing price of November TTF futures.

Please see the full update below.

Russian-gas-price_customs_13Dec21_FINALDownload