UPDATE 1-Russia's gas exports to Europe surge in July

Thu Aug 1, 2013 6:52am EDT

* Gazprom gas exports to Europe up 29 pct in July, y/y

* Russia to remain key energy supplier to Europe

* EU gas supplies in pct:

By Vladimir Soldatkin

MOSCOW, Aug 1 (Reuters) - Gazprom increased gas exports to Europe, its main source of revenues, by almost a third in July, even as consumers in Europe struggle to loosen dependence on Russia's top gas producer.

Gazprom said on Thursday its gas exports to "far abroad" - which under the company categorisation means the European Union and Turkey - increased by 29 percent to 14.04 billion cubic metres (bcm) from the same period a year ago.

State-controlled Gazprom is facing increasing competition on the European market, while President Vladimir Putin has announced that it would only be able to increase domestic prices in line with inflation for five years from 2014.

The company said its daily exports stood at 470 million cubic metres in July, which was a five-year high, in Europe, which accounts for over a half of Gazprom's total revenues.

The company is aiming to restore its gas sales to Europe, where it covers a quarter of gas consumption, to 152 bcm this year from 139 bcm in 2012. Gazprom had said it increased gas exports to Europe by 10 percent in the first half of the year.

European clients have been trying to reduce purchases of gas from Gazprom which sells via pipelines mostly under long-term contracts pegged to the rising price of oil.

Some European companies, including German utility RWE , have successfully challenged Gazprom in courts, winning better supply terms and price cuts.

They have also increasingly been turning to alternative sources of energy, such as coal and liquefied natural gas (LNG).

But Moscow will likely remain Europe's primary energy supplier for many years and possibly decades as the EU has so far failed to substantially replace Russian gas and oil exports.

Reuters' own research indicates that in 2023 Russia will likely remain the dominant supplier, as it boosts exports while output in the EU and Norway falls.

Gazprom declined to comment on Thursday on total gas exports in January-July and on the reasons behind the recent surge, saying only that "consumers usually receive such volumes during the peak of autumn and winter season".

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