European gas market into transition

Moscow: Russian supremacy in the European gas market seems to be decaying since its closest rival Norway boasted record high exports in 2012, with the Russian state controlled oil giant Gazproms export declining to the worst numbers in the last 10 years. According to Europes key statistics office Eurostat, Norway increased its exports 16% in 2012 to reach 107.6bn cubic metres while at the same period, Russias gas giant Gazprom cut sales to Europe and Turkey by 8%. Michael Korchyomkin, head of East European Gas Analysis, quoted in a News Daily that Norways 16% increase in export is a record level, close to the Russian gas exports to Europe while Russia exported the lowest level in 2012 for the last one decade. Experts say that Norway is hitting the heart of the European gas market i.e. Germany. According to recent estimation, In 2011 Gazprom supplied 30bln cubic meters while its closest rival Norway sold just a bit less 28bn cubic meters out of the total 80bn cubic meters of gas Germany consumes annually. Furthermore in a recent development, Norway has signed a 10 year contract to supply gas to Germanys Wintershall. Competitive pricing has become a crucial issue at a time when crisis stricken Europe cant afford huge bills. So according to experts, Norways lower gas prices are another tool to win customers. The countrys Petroleum Ministry, Ola Borten Moe suggests to further reducing the gas transportation charges in new contracts significantly by as close to 7%. At the same time, it not all well for the Russian monopolistic giant, Gazprom since its 9M 2012 IFRS results showed the companys profit for the period was down 12% year on year to $27.1bn, with the net sales of gas decreasing by 8% year on year, to about $61.4bn. Earlier in the week Fitch rating agency predicted a further fall of sales for Gazprom in 2013, referring to weak economic conditions and slack demand. EPC News Bureau