Early 2021 sales point to Russian gas export recovery

Significance

Gazprom faced unprecedented disruptions in 2020: a mild European winter in 2019-20, the slump in demand stemming from COVID-19 impacts, and competition from liquefied natural gas (LNG) which depressed European gas prices. Declining sales undermined Gazprom's share in the European market and resulted in a USD3bn loss over nine months.

Impacts

• Gazprom will use its own trading platform and spot trading in European gas hubs to supplement contract sales in times of volatility.
• Policymakers plan to establish a mechanism to ensure that Russian LNG deliveries to Europe do not compete with pipeline exports.
• Gazprom's domestic agenda will be dominated by government instructions to accelerate gas supply provision to under-served regions.