Gazprom's export price continued to fall below profitability
17 Aug 2020

Gazprom's export price continued to fall below profitability

The average price of Gazprom's gas exports in June 2020 dropped to $ 82 per thousand cubic meters from $ 94 in May. This price has become even lower and below the break-even level of Russian gas supplies to Europe.

This was reported by "Interfax" with reference to the Federal Customs Service of Russia.

According to Interfax estimates, the profitable level of exports for Gazprom is not less than $ 100 per 1,000 cubic meters: $ 13 - production cost, $ 14 - PVKK, $ 27 - transportation in Russia, at least $ 20 - transportation to target European markets - a total of more than $ 70 , and then you need to add a duty of 30%.

And according to Fitch Ratings, the break-even level is $ 105 per thousand cubic meters.

In January 2020, according to the Federal Customs Service, the average price on Gazprom's export portfolio was $ 162, in February - $ 143, in March - $ 125, in April - $ 109, in May - $ 94 per thousand cubic meters.

Thus, for the second reporting month, Gazprom is selling gas abroad at a loss.

Much of Gazprom's export portfolio is tied to various spot indices.

In June, the spot price in Europe (quotes "day ahead" of the Dutch TTF) recovered slightly - to an average of $ 57 per thousand cubic meters from $ 52 on average in May.

Now the price of TTF has recovered to $ 86 per thousand cubic meters.