By Dmitry Zhdannikov
LONDON, March 3 Europe will become even more
dependent on Gazprom's gas supplies in years to come,
the Russian state company said on Monday, despite calls for
sanctions against Moscow over the Ukraine crisis.
With its stock down more than 13 percent amid market jitters
over the stability of Russian gas flows via Ukraine, Gazprom's
management was upbeat as it held its annual meeting with
investors in London.
Link to fund manager interview:
"Gazprom has increased its share in European markets because
Europe's domestic production has fallen in countries such as
Britain and Norway ... we see no signals that the situation in
Europe will change," Gazprom deputy head Alexander Medvedev
Gazprom, which supplies more than a quarter of Europe's gas
needs, cut exports twice to Ukraine over the past decade amid
pricing disputes with Kiev.
The European Union has accused Gazprom of using gas as a
political tool and said it would seek to diversify its sources
Gazprom's share of European gas markets last year rose to 30
percent from 25.6 percent in 2012, Medvedev said, as it shipped
record volumes of 162.7 billion cubic metres (bcm) while
Europe's consumption shrank.
"Europe simply won't see the arrival of gas suppliers of
such calibre (as Russia, Norway or Algeria) any time soon,"
Russian gas exports to Europe in the next four years should
be only slightly lower than in 2013, he said. Ukraine transits
less than half of total Russian volumes to Europe, with the rest
going via Belarus, under the Baltic and Black Seas.
Medvedev said that until Russia builds a new pipeline -
known as South Stream - to Europe under the Black Sea, it would
rely on Ukraine for the transit of at least 70 bcm a year.
"We cannot fully avoid transit risks without building South
Stream. This is why we are moving so confidently towards
starting the project in 2015," he said.
Gazprom's executives said transit to Europe was flowing
normally via Ukraine but otherwise gave little indication about
events there. Investors asked few questions about the issue.
"Gazprom's management has no influence on the situation in
Ukraine. It is the government that will decide, not Gazprom,"
Oleg Maximov from Sberbank CIB said.
Jeffrey Woodruff from Fitch Ratings said gas disruptions
were not his base scenario for now.
"If it were to happen, it could take longer to resolve than
during previous disruptions - because Gazprom was in control of
the supply situation back in 2006 and 2009. This time,
disruptions could possibly come from sanctions, which could take
longer to resolve," he said.
Gazprom declined to comment on possible sanctions.
The company's head of strategy, Dmitry Lyugai, said Gazprom
believed Europe would be able to cover no more than a tenth of
its current demand from shale gas fields by 2030.
"There will be no shale miracle in Europe," he said.