"Gazprom may lose half of its export revenue after losing the European market - Reuters
Gazprom's exports in 2023 may drop to 50-65 billion cubic meters excluding China
Russia's loss of the European gas export market is beginning to affect Gazprom's revenues, reducing budget revenues, which will not be compensated for.
Source. This follows from Reuters calculations and analysts' comments.
Details. In January of this year, Gazprom's revenue from gas exports fell to $3.4 billion from $6.3 billion a year earlier due to a drop in supplies to Europe.
These data and the forecast of export volumes suggest that revenues will almost halve by the end of the year.
"Gazprom did not disclose its gas export forecast for this year, but analysts estimate that it could be around 50-65 billion cubic meters, excluding supplies to China.
"Deliveries to Turkey (about 30-32 bcm), China (15.5 bcm with an increase to 25-30 bcm in '23) and the CIS countries (about 25 bcm) will not be able to replace the EU market," Loko-Invest analysts said in a review.
If we take into account the average forecast of the Russian Ministry of Economy's gas export price for this year at $700 per 1,000 cubic meters, Gazprom can earn $35-46 billion from supplies to Europe and Turkey.
BCS analyst Ronald Smith believes that with average gas prices at the European hub of $700 per 1,000 cubic meters in 2023, the average price of Gazprom's exports will approach $615, and the company's revenues in this segment will fall to $40 billion.
Exports to China, where the selling price of gas is much lower than in Europe and is estimated at $290 per 1,000 cubic meters, can bring Gazprom only $6.3 billion in 2023, Smith says.
For the year as a whole, Gazprom's export revenues could be almost twice as low as in 2022 and 16% less than in 2021, when, according to the Federal Customs Service, the concern saved about $55 billion from gas sales.
Gazprom is trying to reconfigure its exports to China and Turkey, which requires large-scale financial injections into the construction of gas transportation infrastructure. This year, the company's investment program has grown to a record 2.3 trillion rubles.
Background. As reported, gas demand in Norway has fallen to its lowest level in 50 years.
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