Russian state natural-gas firm OAO Gazprom (GAZP.RS), battered last year by increased competition and lower demand in the lucrative European market, said it sees an uptick in demand for its gas as Europe's economies recover.
Russian state natural-gas firm OAO Gazprom (GAZP.RS), battered last year
by increased competition and lower demand in the lucrative European market,
said it sees an uptick in demand for its gas as
Europe
's
economies recover.
Gazprom's profits slipped almost one-tenth in 2012 as sales to
Europe
fell
amid competition from coal, pushed out of the
U.S.
market by a surge in gas production there, and liquefied natural gas.
But exports to
Europe
were up 14.5% in the first
eight months of this year compared to last year, Gazprom said Tuesday, as it
reported a rise in first-quarter profit of 5% to 380 billion rubles ($11.4
billion).
"Future outlook remains positive due to the expected ongoing recovery in
Europe
[and]
strong demand for Russian gas," the company said in a statement. State-controlled
Gazprom has come under pressure from the government to halt declining sales, as
it accounts for more than 10% of
Russia
's
export revenues. Russian competitors, such as OAO Novatek (NVTK.RS), are eating
into Gazprom's domestic market share, and officials are drafting legislation
that will allow them to ship LNG abroad, breaking Gazprom's long-held monopoly
on exports.
Analysts say that demand for Russian gas in
Europe
will
increase as economies there recover while production slides.
But competition from LNG, much of which was diverted to Asia this year where
prices are higher, is likely to be strong as new projects in Africa and
Australia add to global supply, said Ildar Davletshin, an analyst at
Renaissance Capital.
"
Europe
had to take more Russian gas, but it's not a
long-term trend," said Mr. Davletshin. "If LNG kicks back in, gas
exports in the midterm will be flat, capped at around 140-150 billion cubic
meters per year."
Gazprom aims to send 152 billion cubic meters to
Europe
this
year, where it covers one-quarter of consumption.
Gazprom shares were up 0.8% in
Moscow
midafternoon at 132.47 rubles, while
Moscow
's
Micex index was up 0.3%.
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