“Gazprom” decided to refuse “Rosneft” in the export of its gas to Europe

The Agent Of Rosneft

At the end of last week “Gazprom” has received from the energy project Agency agreements with Rosneft for the export of its gas in the UK, said the high-ranking source in “Gazprom” have confirmed two members of the monopoly and the employee “Gazprom export” (“a daughter” “Gazprom”). It was supposed that “Gazprom” will buy gas from Rosneft on export netback (export price minus transportation costs) and put it in BP — a draft of this agreement, “Rosneft” has directed to the Ministry of energy, and then transferred to “Gazprom”. But the gas monopoly will reject this draft agreement “and in fact, and form,” said the source .

A negative response of “Gazprom” prepared, now it is to be signed by the management of the company, says one of them (the head of “Gazprom” Alexey Miller on may 10, just got back from holiday). Among the reasons, on which “Gazprom” does not agree to become an agent of Rosneft, the threat of competition “the Russian gas with Russian”, as well as the possible lack of pipeline capacity. “The European and Turkish buyers of “Gazprom” taking into account the obligation of “take or pay” contracted on a long term basis gas company in amounts greatly exceeding the actual sale. In a period of low gas demand, we have surplus capacity. But if buyers will request to increase supplies under the existing contractual obligations, in pipelines may simply not be enough space for gas pumping third party,” explains a source in “Gazprom”.

The press service of “Gazprom” and “Gazprom export declined to comment.

Letters Sechin

The head of “Rosneft” Igor Sechin in October 2015, has asked President Vladimir Putin to allow the company to export gas for the sale of BP (which owns a 19.75% of Rosneft) in the amount of 7 billion cubic meters per year, sources told me in March. Then, the press-Secretary of “Rosneft” Mikhail Leontyev confirmed that the company has a European buyer (but not called it), and Putin’s spokesman, Dmitry Peskov, said that no decision on the access to export pipeline gas from other companies, in addition to “Gazprom”, is not accepted.

According to two sources in “Gazprom”, at the beginning of April 2016 Sechin, Putin wrote a new letter, which reported that BP is ready in the future to increase the purchase of gas from Rosneft to 25-50 billion cubic meters per year, if the Russian company will get the right to export gas independently or through “daughter” of “Gazprom”. Information about the new letter, confirmed a source in “Rosneft”. But then start diverging: according to a source in “Rosneft” on the letter is the resolution of Putin “Agree”, and according to sources in “Gazprom”, such a resolution on the letter no.

Press Secretary of “Rosneft” Leontief and the representative BP in Russia Vladimir Buyanov declined to comment. Putin’s spokesman Peskov did not respond to a request .

Right, not an obligation

6 may draft an Agency agreement of Rosneft with Gazprom, told reporters energy Minister Alexander Novak. He said that the energy Ministry is still in favour of retaining a single export channel, and the conclusion of the Agency agreement is a question of civil relations “Gazprom” and “Rosneft”. Similar is the position of Deputy Prime Minister Arkady Dvorkovich, who oversees the fuel and energy complex. On Tuesday, may 10, he said that the government discusses liberalization of gas exports and has no plans to change the regulatory framework to be able to arrange the export of pipeline gas “Rosneft”. And Agency agreement — is voluntary: “I know that “Gazprom” and “Rosneft” are among a discussion. If Gazprom wants to work on the basis of Agency agreements — has the right to do himself. But I’m not sure what he wants. At least the comments were that they will not” — quoted Dvorkovich TASS.

“Falling prices will see anyway”

Rosneft and NOVATEK, which also is seeking opportunities to export gas to Europe via Gazprom will receive the right to export pipeline gas to Europe, said the chief economist of BP Vladimir Drebentsov. In an interview with “Interfax” on the sidelines of the conference “Flame 2016″, he noted that the words of the Russian authorities for permission to export gas via a single export channel” (through Gazprom) actually already imply permission to export gas from independent producers. “As far as I understand, Russia wants to sell more gas, but “Gazprom” has already ran into the limits [of the EU competition authority], and the gas can be sold independent”.

According to Drebentsov, the argument that the liberalization of exports will result in falling prices, is untenable: “the price Drop we will see anyway, because in Europe there will be more gas from other sources”. Russia will have to make a choice between market share and revenue, a major competitor of Russian gas will be LNG, primarily from the USA, which in April began the export of gas to Europe, the expert added.

Senior analyst, Vygon Consulting Maria Belova believes that the European gas market has “precontractual”: the average level of the selection gas on contracts is about 75%. At current forecasts of gas demand Europe has closed its gas needs by 2025, so new players in the market will have to offer significant discounts, warns Belova.

A Third Of Gazprom

According to “Gazprom export”, in 2015 in European countries and Turkey were delivered 158,56 billion cubic meters of gas. At the end of last year, the Russian company for the first time in 10 years increased its share in the European gas market — with a 30 to 31%, said the Chairman of “Gazprom” Alexander Medvedev. According to the results of January—April 2016 the total volume of exports of “Gazprom” in the countries of Western Europe and Turkey amounted to 57.4 billion cubic meters, which is 20% higher than shipments in the same period of 2015, reported “Interfax” with reference to data of European transit countries.