Gazprom PJSC has ramped up its daily natural-gas flows to key foreign clients so far in March to the highest in seven months as buyers stock up amid lingering concerns that Russia’s invasion of Ukraine may disrupt supplies.
Buyers of Russian gas are boosting requests and trying to get as much of the fuel as they can in case flows dry up later should Moscow retaliate for the severe sanctions imposed on it. Damage to key infrastructure along the Ukrainian transit route poses further risks. Clients have also been encouraged by the price of Gazprom’s March deliveries, according to analysts, while spot rates in Europe topped records at the start of the month.
Gazprom exported an average of 500 million cubic meters of gas a day to countries outside the former Soviet Union in the first 15 days of March, according to Bloomberg calculations based on the company’s data. That’s nearly 19% more than the average for all of February, but remains almost 15% below the level in March 2021.
The Russian producer continues to supply gas in line with requests from consumers, in full compliance with its contract obligations, it said in a statement Tuesday.
Breaking Away
Europe, which relies on Russia for roughly a third of its total gas supplies, is working to wean itself off longer-term. But replacing those huge volumes will require time and the continent will need Russian gas in the near future. Meanwhile, top officials in Russia last week issued several warnings of potential gas supply cutoffs.
Deputy Prime Minister Alexander Novak said Russia could consider stopping deliveries via the Nord Stream 1 pipeline, the biggest link to Europe, in retaliation for sanctions.
Deputy Energy Minister Pavel Sorokin said gas transit flows via Ukraine are at a risk of disruptions as it cannot guarantee security at two key compressor stations along the route. Still, President Vladimir Putin continues to reiterate the country has been fully compliant with its supply obligations.
Gazprom doesn’t provide a detailed export breakdown by country, making it difficult to assess supplies to Turkey and most of Europe, the key market for the company’s foreign deliveries. Russian daily flows toward the borders with European nations have averaged some 384 million cubic meters on March 1-13 compared with 329 million cubic meters per day in February, according to Gazprom data.
Gazprom’s gas output has averaged 1.47 billion cubic meters a day so far in March, down nearly 2% from the previous month, and the lowest since last October, according to Bloomberg calculations. The decline may be due to lower domestic demand amid milder temperatures at the start of the month.
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