Forbes: Gazprom says it can compete with U.S. LNG in Europe
Russian gas giant Gazprom told Barclays Capital recently that it can compete on price with the U.S. liquefied natural gas market in Europe, whenever it gets there, according to a report by Forbes.
The U.S. hopes to eventually make strides into Russia’s natural gas market in Europe, taking away market share from a politically volatile neighbour.
Former Soviet state Lithuania signed a non-binding agreement to purchase LNG from the United States this year. No delivery dates are set. Poland is also looking to the U.S. for future natural gas supply in order to reduce their dependence on Russia. Lithuania opened a floating import terminal last year and Poland plans to open one later this year.
But Gazprom told Barclays during an analyst visit earlier this month that their piped in gas was still cheaper than U.S. imports.
Many people in Russia believe that one of the reasons the U.S. is sanctioning Russian oil and gas companies is because Washington wants to make way for natural gas exports to Europe in the future. Russian energy companies became the victim of Russian politics in Ukraine last July and again in September when the U.S. and E.U. punished them with sanctions.
Gazprom said its market share in Europe was relatively flat last year at 31%, up slightly from 30% in 2013. It expects that export prices to Europe will average $260-270/kcm in 2015, around $100 less than they were in the first half of last year. Gazprom executives told BarCap they expect European demand to pick up by the summer. The company confirmed its reduction in capital expenditures this year, hitting a planned $24 bln as it doesn’t