Gazprom Keeps EU Gas Export Plan Even as Crisis Hurts Demand

OAO Gazprom, the world’s biggest natural-gas producer, maintained its outlook for exports to Europe in 2012 even as the region’s downturn hurts demand.

“The economic crisis in the eurozone has considerably influenced demand for energy,” Gazprom Chief Executive Officer Alexey Miller said today in Omsk, Russia. “Demand for energy in the eurozone has fallen so far in 2012 compared with 2011.”

Still, it’s “too early” in the year to predict potential changes to demand, Miller said. Europe remains Gazprom’s primary export market, he said. Gazprom has said shipments to Europe will probably remain little changed this year at about 150 billion cubic meters.

The Russian gas producer depends on Europe for about half of its revenues. Gazprom’s share of Europe’s gas supply rose to 27 percent last year after cargoes of liquefied natural gas were diverted to Asia.

Gazprom, Russia’s gas export monopoly, reduced supplies to Europe by more than 12 percent in January through April, two people with knowledge of the data said earlier this month. Prices for European customers jumped 19 percent to about $415 per 1,000 cubic meters in the first quarter.

Gazprom may produce 1 percent to 2 percent less than the 528 billion cubic meters planned for this year, Vsevolod Cherepanov, head of production, said last week. Since May, output has fallen short of targeted levels by about 12 percent because of lower-than-expected demand, reaching 1.2 billion cubic meters a day, he said.

“We see the continuing decrease in Gazprom’s export volumes as a risk to the company’s 150 billion cubic meters export plan for 2012,” VTB Capital said in a note today, citing an Interfax report yesterday that said gas exports fell 13 percent from January through May. “On the back of poor European sales, we have already decreased our forecast for export deliveries to Europe to 142 billion cubic meters.”

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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