Press secretary of the CEO of Gazprom Sergey Kupriyanov has kindly allowed me to
write about our brief communication on the export pipeline policy of Gazprom.
According to Mr. Kupriyanov, Gazprom plans to export gas to Europe only by
pipelines that it owns by at least 50%. Sergey Kupriyanov gave the following
list of what he called "our" pipelines (pipelines nostrum).
Export Pipelines of Gazprom
(1) This pipeline was not in the list,
though it is fully controlled by Gazprom.
Remarkably, the whole transit system
of Ukraine with its total export capacity of 142 bcm/year is out of
the picture. The combined capacity of pipelines nostrum is
the minimum volume of 158 bcm/year guaranteed by long-term contracts
of Gazprom for 2020-2025.
In my view, the ownership test of
Gazprom gives Ukraine a theoretical chance to add its pipelines to
the Kupriyanov's list raising the total Russian export
capacity to 320 bcm/year. However, a 50% Gazprom's control over the
Ukrainian transit system would be a serious blow to the South Stream
project (and a
great news for the minority shareholders of Gazprom).
Actually, the minority shareholders
should be concerned about the export pipeline construction plans.
export routes will increase the cost of Russian gas delivered to
Europe and therefore will reduce the shareholders' profits. For
instance, now it is about twice more expensive to supply Czech
Republic via Nord Stream and OPAL, than through Ukraine
and Slovakia. It would be a way more expensive to ship gas to
Austria by South Stream (there is
a ship-or-pay contract of Gazprom with Slovakia through 2029 on
top of all other costs).
Gazprom is controlled by the state, so
the minority shareholders can expect certain compensations from the
state budget. The company may get additional tax benefits and/or
direct budget subsidies like those reimbursing the operating losses
of Gazprom at the Sakhalin-Khabarovsk-Vladivostok pipeline.
Basically, the future subsidies depend on the Russian taxpayers'
ability to subsidize their "national treasure" - Gazprom.
East European Gas
Malvern, PA, USA
April 7, 2013
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