4 Jul 2022 15:26

Gazprom proposes developing mechanism to coordinate Russian pipeline gas, LNG exports in light of currency competition

MOSCOW. July 4 (Interfax) - Gazprom proposes developing a mechanism for coordinating exports of Russian pipeline gas and liquefied natural gas due to the currency competition that has arisen on the market in current conditions.

Kiril Polous, a deputy head of department at Gazprom, aired the initiative during a State Duma Energy Committee round table at which Russia's Energy Strategy until 2050 was discussed.

"We've already proposed this initiative, but unfortunately, it hasn't materialized to date. This is a question of coordinating exports of pipeline gas and LNG. In our view, in the current conditions, with the introduction of countersanctions measures in terms of the special procedure for foreign buyers fulfilling obligations to Russian suppliers, Russian presidential decree No. 172, the development and introduction of this mechanism is of ever more strategic importance to the country. [...] To put it plainly, pipeline gas sales to unfriendly European counterparties are being carried out in rubles, but this measure doesn't extend to the LNG segment, and a kind of currency competition is arising among suppliers," Polous said.

One possible method of regulation would be a customs duty, the creation of economic stimuli to send gas not to the West, but to the East, Polous said. "From the beginning of LNG production in northern regions, more than half of LNG has been supplied to regions of pipeline gas supply subject to a duty, unlike LNG," he said.

Polous also said that Gazprom advocated the principle of universality in granting access to LNG exports, so as not to amend legislation each time. "We consider it necessary to set universal requirements for LNG exporters, which is envisaged by the national program for the socio-economic development of the Far East for the period to 2024 and then 2035. For our part, we have already sent such proposals to the Energy Ministry," he said.

Currently, amendments to the law on gas exports are mostly written with complex wording for certain subsidiaries of Novatek , which plans to implement several LNG projects and has already built Yamal LNG.