Gazprom's gas sales in Europe in the first half of 2016 rose by 14.2%, or 10.6 Bcm, compared with the same period of last year, Gazprom CEO Alexei Miller said Thursday, signaling a sharp slowdown in export growth in the second quarter of this year.
Addressing Gazprom's annual general meeting in Moscow, Miller also hailed the utilization rate of Russia's Nord Stream gas pipeline to Europe, which, he said, far outweighed that of LNG imports.
Speaking of Gazprom's supplies to Europe and Turkey in the first half, Miller provided no absolute figures.
But according to Platts' analysis of Gazprom data, a 10.6 Bcm increase on the 74.3 Bcm sold in Europe and Turkey (excluding the former Soviet Union states) in the first half of 2015 means H1 2016 sales of 84.9 Bcm.
This puts Gazprom well on track to reach its most recently stated target from May of total exports to Europe and Turkey in 2016 of 165 Bcm.
However, the 10.6 Bcm increase in the first half confirms that the growth in Gazprom's gas sales to its core foreign markets stalled in the second quarter after strong growth at the start of the year.
In the first quarter, Gazprom's sales in Europe and Turkey were up 10 Bcm on the same period of 2015, meaning that supply growth was just 0.6 Bcm in Q2.
In the first quarter of 2016, sales to Europe and Turkey totaled 44.4 Bcm, according to official Gazprom data, which was up 29% from 34.4 Bcm in Q1 2015.
This suggests Q2 sales of 40.5 Bcm.
COMPETITIVE IN EUROPE
Miller also said he was confident that Russian gas would remain competitive on the European market, where demand for imported gas is set to grow, according to his company's estimates.
"The share of import gas in European consumption currently amounts to nearly 50%," Miller said.
"Europe's demand for additional imports will grow by no less than 100 Bcm/year by 2025, and can rise to 150 Bcm/year by 2035," Miller said.
He said that data from 2015 showed that trunk gas pipeline supply enjoys greater demand than LNG in Europe.
"While only one quarter of European LNG capacity was utilized last year, gas deliveries via Nord Stream grew despite regulatory [restrictions]," he said, a likely reference to the constraints on the use of the OPAL gas pipeline in eastern Germany. Under a 2009 decision by German energy regulator Bundesnetzagentur and approved by the European Commission, Gazprom is limited to using a maximum 50% of the capacity of the 36 Bcm/year OPAL pipeline, which connects the Nord Stream to the European pipeline grid.
"Nord Stream capacity was used at up to 70% in 2015," Miller said. "In 2015, our supplies to Germany alone exceeded the combined volume of LNG imports to the EU," he added.
Gazprom continues to argue for a second Nord Stream pipeline system to boost export capacity to Europe to 110 Bcm/year.
