Gazprom doesn’t plan a “price war” against U.S. exports of LNG to its profitable European market, a company official said Feb, according to the Wall Street Journal. U.S. LNG sellers will find it hard to compete in Europe with Russian gas under current market conditions, Gazprom’s deputy chairman Alexander Medvedev told an investor meeting in London. U.S. gas must be liquefied, shipped and turned back into gas, costing more than Russia’s pipeline gas deliveries.
“There is no need for us to launch any price war,” Medvedev said. “We are very relaxed about U.S. LNG, though very attentive.” He said if U.S. LNG prices did fall, Gazprom would seek to cut its own costs. European governments have been hoping that U.S. LNG exports, due to start this year, would help the region diversify its energy supplies away from Russia.
Gazprom has long been the single biggest gas supplier into Europe. Last year, Russian gas amounted to almost 31% of European gas consumption, up from 30% in the previous year. Gazprom vows to keep that market share steady for the foreseeable future. “The European market is and shall remain the main market for our exports,” Medvedev said. Europe accounts for the bulk of Gazprom’s profits, helping to offset the lower revenues the company earns in Russia.