The rising Russian share of the European gas market should not be a cause of concern for Europe, a senior official from Gazprom Export said Monday, as customers are merely choosing the cheapest option for meeting their gas needs.
Sergei Komlev, head of Gazprom Export's pricing directorate, said at the Flame conference in Amsterdam that the company had "passed the exam" of supplying gas to Europe at competitive prices given the record volumes supplied in 2017 of 194 Bcm.
Gazprom's total share of the European gas market was around 34% in 2017, well up on the 27% from earlier in the decade.
"European customers have made a choice in favor of Russia," Komlev said. "It is time for Europe to re-evaluate its attitude toward Russian gas. It is time to stop repeating the mantra of European dependence on Russia," he said. "If one day Russia's share of the European market is 40%, there is nothing wrong with that," he said, adding that this showed only that Russian gas was competitive. Russia and Gazprom have been criticized for years for being the dominant supplier in Europe and using the fact to charge higher prices for countries with fewer or no alternatives to Russian gas.
The European Commission formally charged Gazprom in April 2015 with alleged market abuse in central and eastern Europe, a case that is still ongoing.
The charges focused on Gazprom restricting gas resales across borders and allegedly charging unfair prices.
Komlev said Gazprom had undertaken "serious work" to change its pricing paradigm in order to meet the needs of the changing European gas market.
He added that there were "no gas islands" in Europe anymore and that all parts of Europe had access to other sources of gas, meaning buyers had alternatives to buying Russian gas.
Komlev's remarks come despite certain parts of eastern Europe -- such as Bulgaria and Serbia -- still being almost entirely dependent on Russian gas imports.
Summer demand
Komlev also said that Russian gas was likely to remain in demand in Europe this summer given the need to refill storage stocks, which fell to "historically low levels" at the end of this winter.
But, he said, Gazprom was not flooding the European market with gas, but the company was instead responding to demand requirements from customers.
"At the moment nominations [for Gazprom gas] are high," Komlev said. "This summer there will be a lot of demand -- not from the power generation sector as in previous years -- but coming from seasonal stocks," he said.
Komlev added that he "hoped" Russian gas deliveries to Europe would remain high over the summer.
He also pointed to the utilization rate of Russian export pipelines as evidence of the competitiveness of Gazprom gas supplies.
While Europe's LNG import terminals continue to operate at just 25% of their import capacity, Russian pipelines last year flowed gas at "almost capacity," Komlev said, with the exception of the route via Ukraine.
He compared it with a utilization rate last year in the pipelines from Algeria to Europe of 51% and from Libya of just 26%.
"Russian gas is not a problem, it is a solution," Komlev said.
