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US shale should cause Gazprom to lower gas export prices by 2016

30 April 2013

According to Oil & Gas Eurasia, Russia's Ministry of Economic Development is predicting that competition from North American shale gas exports will force Gazprom to lower its export prices significantly by 2016.

Rising competition on the global gas market between Russia, the United States, and countries of the Middle East will have the greatest midterm impact on Russia's energy industry, according to the Ministry's report.

The Ministry says prices for Russian gas in Europe will gradually decline to $329 per 1,000 cubic meters by 2016. Currently, the average price of Gazprom gas in Europe is $399.9 per 1,000 cubic meters, according to the report. By comparison, the Henry Hub spot price for natural gas in the United States is $157 per 1,000 cubic meters and the UK's National Balancing Point spot price is $363 per 1,000 cubic meters, Russian newspaper RBC Daily reports.

The report says competition between Russia, the United States, and gas producers in the Middle East over access to Asian energy markets in particular will increase rapidly. The race for new global LNG capacity to supply Asia is already heating up.

To see the original Oil & Gas Eurasia article, go to the link below.