GAZPROM'S SHARE UP TO 34%
REUTERS - Russian gas exporter Gazprom aims to build on its record sales to Europe in 2016, helped by the expansion of its German subsidiary Wingas, a board member of the subsidiary told Reuters in an interview.
Despite a drive by the European Union to diversify gas supplies and reduce its reliance on Russian imports, Gazprom increased its market share in Europe to 34 percent last year from 31 percent in 2015, posing a challenge to policymakers.
"We have significantly expanded our presence especially in Austria and the Czech Republic, but also in the Netherlands," said Ludwig Moehring, head of sales at Kassel-based Wingas.
"It has been and remains (Gazprom's) goal to safeguard a sales channel for gas in Europe (via Wingas), and to sell more gas in the different applications," he added.
Gazprom's sales to Germany jumped 21 percent in the first half of January, having hit a record 49.8 billion cubic meters (bcm) in 2016, which was up 12.5 percent on 2015.
That was the biggest single chunk of the 179.3 bcm Gazprom says it shipped to Europe last year.
The Russian group became sole owner of Wingas, a wholesaler with a market share of over 20 percent in Germany, in October 2015 after running it as a joint venture with BASF.
Wingas sells gas to local utilities and industry, and is the number two supplier to Germany, behind Uniper but ahead of RWE and VNG.
Moehring said expansion into eastern and southern European markets was following inroads into the Benelux, UK and French markets, but that Europe's diverse gas sources and savvy customers meant competition was intense.
"Competition is tough as nails and transparent," he said.
Clients were buying in ever smaller transactions, rather than locking in large volumes in one go.
The price of gas for 2018 at Germany's NCG trading point has fallen by 20 percent over the last two years and is not far off 12-year lows, helping consumers, but squeezing suppliers' margins.
But Moehring said the coal price's recent run-up to 2-year highs could help boost demand for gas burnt in power stations.
"One good piece of news for us and the climate is that coal has gone up significantly in recent months," he said.
The gas industry uses the fact that gas is only half as CO2-polluting as coal as a marketing argument.
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