Gazprom to boost LNG sales in 2020

Russian state-controlled Gazprom plans to sell around 6mn t of LNG this year, up from 4.3mn t a year earlier, Gazpromexport general director Elena Burmistrova said.

The firm sold 3.65mn t in the first half of this year, meaning it would have to export 2.35mn t in the second half to meet its target.

The firm expects Europe's LNG imports to fall next year, with quicker pipeline receipts from Russia and a slowdown in global liquefaction capacity growth owing to commissioning delays for new export projects. European LNG and gas demand next year could also be impacted by restrictions imposed to slow the spread of the Covid-19 outbreak, which would weaken energy consumption in the region, Burmistrova said. But rising Asian consumption will support global LNG demand growth.

Growing LNG bunkering demand in Europe, coupled with weaker European domestic production, could provide opportunities for Europe to import more LNG in the future, Burmistrova added. European gas demand will also be supported by coal-to-gas fuel switching, which Gazprom sees as a potential in Germany.

Gazprom's LNG exports are set to further increase next year once the planned 1.5mn t/yr Portovaya export facility is commissioned, Burmistrova added. But the commissioning of the Portovaya project has been pushed back multiple times. Gazprom had intended to start operations at Portovaya LNG in 2018, but this was later pushed back to 2019 and again to 2020.

Gazprom has term supply contracts for 900,000 t/yr with Austrian oil firm OMV and around 2.5mn t/yr with Indian state-owned Gail. Most of the company's LNG sales are in the Asia-Pacific market — with all sales handled by subsidiaries Gazprom Marketing and Trading Singapore and Gazprom Global LNG. Gazpromexport manages sales to OMV.

Gazprom has contracts for up to 2.9mn t/yr of supply from the Novatek-led 17.44mn t/yr Yamal LNG project and the 1.2mn t/yr Kribi plant offshore Cameroon. Its LNG portfolio also includes a 1mn t/yr share of output from the Gazprom-led 9.6mn t/yr Sakhalin 2 project in Russia's far east and spot market purchases.

By Anastasia Goreva and Ellie Holbrook