(Bloomberg) — Gazprom PJSC increased exports to its main buyers in Europe, Turkey and China last year, yet flows remained below pre-Covid levels as the producer capped deliveries to the EU as a whole amid the continent’s worst energy supply crunch in decades.
The Russian company delivered 185.1 billion cubic meters to clients outside the former Soviet Union, Chief Executive Officer Alexey Miller said in a statement on Sunday. That’s 3.2% above 2020 levels, but lower than 2018 and 2019, which were around 200 billion cubic meters. Daily exports in December, when the peak demand season often starts, averaged 439 million cubic meters — the lowest level for that month since 2014, according to Bloomberg calculations.
Gazprom’s exports have been closely scrutinized as tight supplies in Europe sent prices soaring to records. With winter setting in and the region’s stockpiles dangerously low, the Russian company has been sending only as much gas to EU clients as it’s obliged to under long-term contracts, and for months hasn’t offered spot cargoes going into early 2022.
It’s unclear why Gazprom has been reluctant to offer spot gas to Europe. While the company has pointed to demand destruction as a result of surging regional prices, European officials say the Russian producer is intentionally withholding to speed up approvals for the contentious Nord Stream 2 pipeline.
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Gazprom doesn’t break export data down by country, making it difficult to estimate 2021 flows to individual markets. However, Miller said that the largest growth in deliveries was to its top three European clients — Germany, Turkey and Italy. Flows to China exceeded Gazprom’s contractual obligations throughout 2021, according to Miller.
Production Spike
Gazprom’s gas output for 2021 reached 514.8 billion cubic meters, the highest since 2008. December daily production averaged 1.523 billion cubic meters, the highest since 2013 for that month.
With Russian pipeline exports to most EU countries capped in December, the bulk of the extra gas stayed at home as abnormally low temperatures set in over the final days of the year.
As temperatures plunged, deliveries to domestic clients in late December surged to as high as 1.656 billion cubic meters a day, Gazprom said, higher than its average daily production levels for December. To meet the demand, the company said withdrawals from local underground storage reached a five-year high.
Russia can afford to draw record amounts from its inventories as Gazprom filled the domestic sites with all-time high gas volumes of 72.6 billion cubic meters by November.
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