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    GAZP   RU0007661625

GAZPROM

(GAZP)
  Report
End-of-day quote Moscow Micex - RTS  -  2022-07-07
198.00 RUB   +0.04%
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SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Russia's Ukraine gas transit sanction threat a fresh blow for Europe

09/28/2022 | 04:31pm EST

LONDON, Sept 28 (Reuters) - If Moscow carries out a threat to sanction Ukrainian energy firm Naftogaz, one of the last functioning Russian gas supply routes to Europe could be shut, exacerbating the energy crisis just as the crucial winter heating season begins.

Naftogaz initiated a new arbitration proceeding against Gazprom earlier this month, saying the Russian company has not paid transit fees for sending its gas to Europe via pipelines that cross Ukraine.

Gazprom this week rejected all the claims, adding that Russia may introduce sanctions against Naftogaz in the case that it further pursues the matter. Such sanctions would prohibit Gazprom from paying Ukraine transit fees, which analysts say could end Russian gas flows to Europe via the country.

Yuriy Vitrenko, chief executive of Naftogaz, said the company will continue with arbitration proceedings against Gazprom regardless.

"(Sanctions) would make into reality the worst-case scenario that European governments have been preparing for all summer, a European gas market without Russian gas," said Natasha Fielding, head of EMEA gas pricing at Argus Media.

"Transit through Ukraine is the only Russian gas delivery route to Europe still in use besides the Turkish Stream pipeline, which serves southeast European countries," she added.

Dutch wholesale gas prices, the European benchmark, shot up after Gazprom's talk of sanctions on Tuesday, and rallied as much as 13% on Wednesday to stand around 120% higher since the start of the year.

Gas flows via the only operational Ukraine transit route through Sudzha are currently around 42 million cubic metres a day. Kyiv had already in May suspended the Sokhranivka route which delivered almost a third of the fuel piped from Russia to Europe through Ukraine, declaring force majeure.

According to data from think-tank Bruegel, the European Union (EU) imported around 155 billion cubic metres (bcm) of gas from Russia last year or about 12.9 bcm a month.

Russian gas imports from the start of 2022 to the end of last week stood at 60 bcm, compared with 81 bcm in the first half of last year alone, according to Bruegel's data.

Leaks detected on the Nord Stream 1 pipeline this week make a resumption of flows on that route unlikely after they were cut to a fraction of capacity and finally suspended last month with Moscow citing the need for maintenance.

Meanwhile the Yamal-Europe pipeline has been flowing eastbound from Germany to Poland for much of this year, although it has been in stop-start mode for weeks.

WINTER RISK

Should the Sudzha flows come to a halt, the only Russian gas being piped to Europe would be via Turkey and the Black Sea through TurkStream, which has an annual capacity of around 31.5 bcm.

Gazprom ramped up supply to Hungary via the pipeline in August but overall Europe has been preparing for months for a complete stoppage of Russian gas deliveries this winter.

Governments have been scrambling to diversify supply, buying more liquefied natural gas from suppliers such as the United States, Qatar and Egypt, as well as introducing measures to curb demand domestically and save energy.

As a result, European gas storage was 88% full as of Sept. 26, although there are variations between countries.

"There needs to be a combination of 'ifs' to threaten Europe's energy supplies this winter, including a harsh winter, prolonged French nuclear outages, and other infrastructure issues," said Norbert Rücker, head of economics and next generation research at investment bank Julius Baer.

However, a greater risk remains for next winter as countries will end this year's winter gas season with very low stocks and have less Russian pipeline gas available than ever before to replenish stocks during the spring and summer.

(Reporting by Nina Chestney; Additional reporting by Christoph Steitz; Editing by Pratima Desai, Kirsten Donovan and Marguerita Choy)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
GAZPROM 0.04% 198 End-of-day quote.-42.32%
JULIUS BÄR GRUPPE AG 0.37% 54.32 Delayed Quote.-11.54%
S&P GSCI NATURAL GAS INDEX 2.70% 283.9405 Real-time Quote.55.05%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 0.16% 62.5 Delayed Quote.-16.54%
US DOLLAR / TURKISH LIRA (USD/TRY) 0.00% 18.63991 Delayed Quote.39.97%
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Financials (USD)
Sales 2021 10 241 B 162 B 162 B
Net income 2021 2 093 B 33 210 M 33 210 M
Net Debt 2021 2 927 B 46 436 M 46 436 M
P/E ratio 2021 0,05x
Yield 2021 1 143%
Capitalization 4 682 B 74 444 M 74 282 M
EV / Sales 2020 1,44x
EV / Sales 2021 1,08x
Nbr of Employees 468 000
Free-Float 50,5%
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Alexei Borisovich Miller Deputy Chairman & Chairman-Management Board
Viktor Alexeevich Zubkov Chairman
Denis Vladimirovich Fedorov Head-Marketing & Administration Department
Yuri Stanislavovich Nosov Head-Administration Department
Timur Askarovich Kulibayev Independent Director
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