Analysis - Novatek set to oust Gazprom as Russia's top gas supplier to Europe

investing.com:

By Oksana Kobzeva and Vladimir Soldatkin

MOSCOW (Reuters) — Increased supplies of liquefied natural gas (LNG) from Russia's Novatek (MCX:NVTK) mean the company is close to overtaking Kremlin-controlled Gazprom (MCX:GAZP) as the country's leading fuel supplier to Europe, Reuters calculations show.

Novatek's rise towards the coveted top spot underlines how much the Ukraine conflict has disrupted Russia's and the world's energy industry as Europe turns to LNG and away from Gazprom's network of pipelines that dominated European supply for decades.

Russia's gas, in contrast to its oil, is not subject to Western sanctions, although Brussels is considering extending its embargo on Russian fuel.

The European Union has already sought to cut its reliance on Russian supplies and aspires to replace gas with renewable energy as it strives to curb its emissions. In the immediate term, it has increased its LNG imports.

Novatek, founded almost 29 years ago, secured Russian state support to expand in the LNG market following the launch of its vast Yamal LNG plant in northwest Siberia in 2017.

Reuters calculations, based on figures from Refinitiv Eikon data, showed that Gazprom's total exports of LNG and pipeline gas supplies to Europe were around 13.8 billion cubic metres (bcm) between January 1 and July 15.

Novatek's exports to the region in the same period amounted to 12.34 bcm.

Gazprom and Novatek have not replied to Reuters' requests for comment.

«Gazprom has likely forever lost 65%-75% of its historical share of the European market,» Ronald Smith of Moscow-based brokerage BCS said.

However, he added it would be «very difficult» for Novatek to completely replace Gazprom in Europe, as Gazprom's remaining customers have limited