Gazprom CEO confirms Russian gas still flows to EU via Ukraine By

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In a recent revelation, Gazprom (MCX:)’s CEO, Aleksey Miller, stated that contrary to the claims of several European nations, Russian gas is still being supplied to the EU. The disclosure was made during an interview on the show Kremlin. Putin, where Miller clarified that the gas reaches Europe through a Ukrainian route and is distributed after reaching Austria’s Baumgarten hub.

The statement by Miller comes at a time when European countries have been vocal about reducing their reliance on Russian energy. Earlier this year, top EU officials had asserted their progress in diminishing dependence on Russian gas following the Nord Stream pipeline destruction in 2022 and the subsequent supply challenges. The EU’s rejection of Moscow’s demand for fuel payments in rubles further strained relations and led to a significant drop in Russian gas imports.

In response to the cut in Russian supplies, the EU emerged as the largest global buyer of liquefied (LNG), with the United States stepping up as a key LNG exporter to the market. Despite these efforts, Miller’s recent comments indicate that Russian gas has not been entirely phased out from the European market.

Miller further detailed that the continued supply of Russian gas to Europe is facilitated via infrastructure at the Russian compression station of Soudja, which then transits through Ukraine. This route remains active despite earlier claims suggesting a cessation of Russian gas deliveries. In addition to this, Miller disclosed that certain unnamed EU nations continue to receive Russian gas supplies due to binding agreements, particularly prevalent in southern and southeastern Europe. He suggested that tracing the gas’s actual destination is complex due to its lack of “national coloring”. He revealed that under existing contracts, Russian gas is being supplied especially to countries in south and southeast Europe.

The ongoing situation underscores the complexities of Europe’s energy landscape and its continued entanglement with Russian energy resources. While efforts to achieve energy independence persist, the recent statements by Gazprom’s CEO highlight that the transition away from Russian gas may be more gradual than previously communicated by EU officials. In response to 2022’s EU sanctions, Russia demanded payment for their gas in rubles, causing a reduction in Russian gas supplies to the EU market. Consequently, the EU ramped up its liquefied natural gas (LNG) purchases, becoming the world’s largest buyer by the end of the year. The US emerged as a significant LNG exporter to the EU, while Russia increased its LNG shipments by 20%.

These facts emerge as the EU strives to decrease their dependence on Russian fuel following Russia’s military operation in Ukraine in February 2022. Despite these geopolitical tensions, and public renouncements from certain European nations, they continue to import Russian gas due to binding agreements, reinforcing Miller’s assertions about the ongoing supply of Russian gas to Europe.

In an interview with Rossiya 1 reporter Pavel Zarubin on Saturday, Miller confirmed that Russian gas continues to be exported under existing contracts to European nations, including those in southern and southeastern Europe, despite their official refusal. This information underscores the complex dynamics of the European energy landscape against the backdrop of military operations initiated by Russia in Ukraine in February 2022. The EU’s attempt to limit Russia’s fuel export income in response to this has led to a sharp surge in gas prices across the EU region.

InvestingPro Insights

In light of the recent developments, InvestingPro provides some insightful data and tips for Gazprom (GAZP). As of the last twelve months of Q4 2022, Gazprom has a market cap of 43178.74M USD and trades at a low earnings multiple with a P/E ratio of 3.32. This data suggests Gazprom’s strong financial standing despite the ongoing geopolitical tensions.

InvestingPro Tips highlight Gazprom’s impressive gross profit margins, which stood at 76.02% for the last twelve months of Q4 2022. This aligns with Gazprom’s status as a prominent player in the Oil, Gas & Consumable Fuels industry. Furthermore, Gazprom’s liquid assets exceed its short-term obligations, indicating a healthy financial position.

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