* Gas sales to Italy up 5.3% so far in 2016
* Turkey was previously second to Germany
* But Italian import growth slower in Q2
Italy is now the second biggest buyer of Russian gas in Europe --
overtaking Turkey -- the head of Gazprom said Wednesday.
CEO Alexei Miller said Italian demand for Russian gas continued to
rise and was up 5.3% so far in 2016 compared with the same period of
last year.
But although volumes to Italy so far this year are up on 2015, the
growth has slowed in the second quarter compared with the first.
In addition, Turkish purchases are considerably down this year
compared with 2015.
"In 2016, Italian consumers have increased their demand for gas from
Russia," Miller said in a short statement.
"Italy is now ahead of one of our biggest consumers -- Turkey -- in
terms of the Russian gas volumes purchased in 2016. Currently it is
the second biggest consumer of Russian gas among all importing
countries," he said.
Germany is the biggest buyer of Russian gas, taking 12 Bcm in Q1.
Italy bought 24.42 Bcm of Russian gas in 2015, the second highest
volume in its history, and in Q1 it purchased 6.36 Bcm of Russian
gas -- a 28% increase compared with the first three months of 2015.
But despite being the number two buyer, total supply growth over the
period January 1-June 15 of 5.3% means a marked slowdown since the
start of Q2.
In addition, Turkish purchases of Gazprom gas have fallen sharply so
far in 2016.
In Q1, Turkey bought just 6.42 Bcm from Gazprom, a 15% fall on the
first three months of last year on continued strained relations
between Moscow and Ankara over the downing of a Russian fighter jet
in November 2015.
SUPPLY SLOWDOWN
Growth in Gazprom's gas sales to its core foreign markets of Europe
and Turkey seems to have stalled over the past two and a half months
after a big surge in supplies in the first quarter.
In Q1, sales to Europe and Turkey (but excluding countries of the
former Soviet Union) totaled 44.4 Bcm, up from 34.4 Bcm in Q1 2015.
But Miller said in early June that sales to the region as a whole in
January-May were up by 10 Bcm, meaning flat sales on the same months
of 2015.
The latest data announced Wednesday said total exports to Europe
were 10.2 Bcm higher in the period January 1-June 15, meaning a
slight increase of just 0.2 Bcm in the past two weeks.
The latest Gazprom data, while not providing absolute volumes,
suggest a further drop-off in growth in some of the company's key
European markets, such as Germany and the UK.
Miller said gas supplies to Germany to June 15 were up 9.1% compared
with 10.4% growth for the first five months of 2016.
In Q1, Gazprom's sales in Germany were up 26.7% to 12.05 Bcm.
Similarly in the UK, which could include volumes sold by Gazprom
Marketing & Trading, Miller said sales were up by 80.4% to June 15
compared with 91.5% growth in January-May.
There has also been a slowdown in supplies to Poland and France.
Despite the slowdown in growth, the amount of gas imported by
European customers with Gazprom contracts has room to increase in
the second half of the year, as pricing under oil-indexed mechanisms
is set to fall from current levels.
--Stuart Elliott, stuart.elliott@spglobal.com
--Edited by Jeremy Lovell,
jeremy.lovell@spglobal.com
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