Tag Archives: Russian gas storage

Gazprom in January: output near capacity points to higher export in coming months

  • In January, Gazprom produced 47.4 bcm of gas, up 1% YoY, according to the company’s statement on Telegram. This means that the average daily gas output was 1,529 mn cu m/d, up 16 mn cu m/d on the same period of last year. We note, however, that the daily average output is down from 1,540 mn cu m/d in mid-January to estimated 1,518 mn cu m/d in the second half of January.  
  • In our estimate the Chayanda field which feeds the Power of Siberia pipeline was the main source of additional output (up 17 mn cu m/d to 48 mn cu m/d). Outside East Siberia the gas production was only marginally lower (down 1.4mn cu m/d to 1,480 mn cu m/d). This might be close to Gazprom production capacity which is around 1,500 mn cu m/d.
  • Gazprom deliveries to domestic consumers in January were up 3.2% YoY to 35.4 bcm (1,144 mn cu m/d). The pace of growth in domestic demand continues to slow down YoY. We expect Gazprom deliveries to Russian customers to flatten out YoY in the remainder of winter, 
  • In January Gazprom export to Europe, Turkey and China fell 41% YoY to 11.4 bcm (368 mn cu m/d). Gas export was also down 16% MoM (compared to December last year).
  • There are signs that gas export to Europe might start to recover in the coming months. Gazprom doubled transit via Ukraine on February 1. We also believe that Gazprom would need to restore gas export to Europe to meet export target for this year.
  • Our modelling of Gazprom gas balance in January indicates that the company reduced withdrawal from Russian and European gas storage by 6.5 bcm (210 mn cu m/d) YoY, to offset for a reduction in export to Europe and Turkey (down 8.4 bcm or  273 mn cu m/d YoY).
  • This means that Gazprom gas storage was around 52 bcm as of end January, up 14 bcm YoY and 15% above 3-year average. At the end of the heating season in Russia (end March), Gazprom gas storage might be as high as 38 bcm, up 23 bcm YoY. The surplus storage could be used to supply additional volumes to Europe in the coming months, in our view.
Gazprom_Jan22-stats_1Feb22_FINALDownload

Gazprom in mid-January: output rises, export to Europe plummets and to China jumps, domestic sales flatten out

  • In the first 15 days of January, Gazprom produced 23.1 bcm of gas, up 2.1% YoY. This means that the average daily gas output was 1,540 mn cu m/d, up 32 mn cu m/d on the same period of last year.
  • The main contribution to extra output (est.19 mn cu m/d) might have come from the Chayanda field in East Siberia, which feeds the Power of Siberia pipeline to China. Gas export to China was up 50% YoY to estimated 44 mn cu m/d, based on numbers released by Gazprom.
  • Gazprom deliveries to domestic consumers in the first 15 days of January were up 3.7% YoY to 16.8 bcm (1,121 mn cu m/d). The weather in Russia has been mixed in January with both cold and mild spells. This pattern might last for the rest of the winter.   
  • Over the first half of January Gazprom export to Europe, Turkey and China fell 41% YoY to 5.4 bcm (360 mn cu m/d). Gas export was also down 17.9% MoM (compared to December last year). We estimate that gas export to Europe only (excluding China and Turkey) was down 55% YoY to 227 mn cu m/d.
  • Our model of Gazprom gas balance for January indicates that the company might have reduced Russian gas storage withdrawal by est. 195 mn cu m/d to offset for a reduction in export (down est. 248 mn cu m/d). This could mean that Gazprom gas storage will be at 52 bcm as of end January, up 14 bcm YoY. At the end of the heating season in Russia (end March), Gazprom gas storage might be as high as 38 bcm, up 23 bcm YoY.
Gazprom_mid-Jan22-stats_17an22_FINALDownload

Gazprom output hits 13-year high in 2021 to meet domestic needs

  • Gazprom Group gas production was up 62 billion cubic meters (bcm) to 514.8 bcm in 2021. These additional volumes have mostly stayed in Russia.
  • Gazprom sales to domestic customers went up 31.9 bcm YoY to 257 bcm. Export to Europe, Turkey and China was up 5.8 bcm YoY to 185 bcm. Injection into Russian gas storage was up an estimated 28 bcm YoY to 61 bcm in 2021. Russian gas storage was 83% full as of 29 December, at 60.2 bcm.
  • In December, Gazprom production might have been close to capacity (47.2 bcm or 1,523 mn cubic meters per day). As in previous three months, the company was sending more gas to domestic consumers and much less gas to export markets compared to last year.
  • There was a significant YoY drop in gas export to Europe (including Turkey) in December (down 5.7 bcm or 185 mn cu m/d). This was offset a reduction in Russian storage withdrawal of 6.9 bcm (225 mn cu m/d) vs last year.
  • Over the next three months we assume that Gazprom output will remain at seasonally high level, domestic demand will be at around three-year average and export will remain tagged to long-term contracts. This would mean that Russian gas storage level might be 34 bcm full at the end of March this year, up 19 bcm compared to 2021.
  • These volumes could be used for additional export, or, in its absence, it could lead to a drop in Gazprom output and sales in 2022.
  • See the report for charts and analysis.
Gazprom_2021_results_3Jan22_FINAL-2Download

Russian gas storage still 83% full after a cold spell in December

  • Russian gas storage was 83% full at 60.2 billion cubic meters (bcm) as of 29 December. The storage has not been much dented by a cold spell in mid-December with14.2 bcm of gas withdrawals over the last couple of months. A late start of the withdrawal season and YoY decline in exports might explain why Russian gas storage is at its highest level over the last five years.
  • Unusually, Gazprom may have had relatively full gas storage in Russia (close to working capacity of 72.6 bcm) in early November, before the company started withdrawals. This could partially explain a relatively high gas storage volume as of end December, in the middle of the heating season.
  • As of December 29, Russian gas storage was 9 bcm fuller than at the end of last year. If the winter gas demand in Russia is close to the five-year average during the remainder of the heating season (January-March next year), Russian gas storage would stand at 34 bcm at the end March 2022. This would be 19 bcm above the level of the previous year.
  • The high level of Russian gas storage might also reflect a YoY fall in gas export in October-December. And If Gazprom export (to Europe, Turkey and China) remains at the current level of around 14-15 bcm per month, exports might drop to around 170 bcm in 2022, down 16 bcm YoY.
  • Fuller Russian gas storage and lower YoY exports could lead to a drop in Gazprom Group output in the coming year. We estimate that the company’s gas output could decline by as much as 35 bcm to 480 bcm in 2022. This could happen if Nord Stream-2 pipeline is not operational and export to Europe is limited to volumes under long-term contracts.

Please see below for more detail.

Russian_Gas_Storage_30Dec21_FINAL-3Download