Russia extends gas export lead over Norway

January 15, 2014

Russia widened its lead over Norway as Europe's biggest gas supplier in 2013, with demand bolstered by a bitterly cold winter helping sales of its discounted gas while production problems trimmed Norwegian output, Reuters reported on January 14.

Russia, whose capacity to supply gas to Europe far outweighs that of Norway, lured back customers after issuing multi-billion euro price discounts.

It also boosting production from its huge Bovanenkovo gas field.

In 2012, Norway spooked its Russian rival with an aggressive pricing policy selling gas to European buyers at cheaper spot-indexed prices and forcing the gas export giant to react.

Fired up to defend its dominant position in Europe, Russian exporter Gazprom agreed to loosen its pricing policy and paid more than $4 billion in the first half of 2013 to European clients who had complained about expensive gas prices linked to the oil market.

On the back of the price cuts, cold weather and more production, Gazprom's supplies to Europe including Turkey rose 16 percent to a record high 161.5 billion cubic metres (bcm) last year from 138 bcm in 2012 while Norway's fell by 5 percent to 102.5 bcm.

Excluding Gazprom's sales to Turkey, Russia supplied around 133 bcm to Europe in 2013, widening its lead over Norway to about 30 percent.

Copyright: Reuters, 2014