About GazpromInvestorsMediaProjectsEnvironmentSocial responsibilityCareersCountering fraudContact us RU EN DE Our websites About GazpromMarketing Europe Gas marketing in Europe 2020 Annual Report (PDF, 23.5 MB) The main goals of Gazprom in the European market are retaining its leadership position, ensuring reliable gas supplies, and improving the efficiency of its marketing activities. European countries have been among the key consumers of Russian gas for over 50 years. Gazprom is the largest exporter of natural gas to the European market. Russia has provided reliable natural gas supplies to Europe for over 50 years Enlarged photo (JPG, 885.1 KB) Over the course of 2020, the Gazprom Group sold 219 billion cubic meters of gas to countries outside the former Soviet Union (including both exports from Russia and sales of gas purchased by the Group abroad). The net revenue from gas sales (net of excise tax and customs duties) totaled RUB 1,811.6 billion. In 2020, Russian gas exports to Europe (under contracts of Gazprom Export) amounted to 174.9 billion cubic meters. Gazprom's activities in the European gas market are underpinned by long-term contracts with take-or-pay clauses. The Company also uses new forms of trade based on short- and medium-term sales, swap operations, and spot contracts. Unified export channel The unified export channel is the backbone of Gazprom's export strategy. Pursuant to the Russian law on gas export, Gazprom has an exclusive right to export gas via gas pipelines. The law allows the Company to pursue a coordinated production and marketing policy and serves as an additional legal guarantee of reliable gas exports from Russia. Long-term contract system Gazprom exports gas to Central, Western and southeastern Europe mostly under long-term contracts. Long-term contracts with take-or-pay clauses are fundamental to stable and sustainable gas supplies. No other contract can guarantee that producers and exporters will get returns on multibillion investments in major gas export projects and that importers will enjoy secure and uninterrupted gas supplies in the long term. The main features of the long-term contracts are as follows: price formula taking into account changes in the prices of the basket of reference goods in the previous six to nine months; clauses forbidding the unilateral termination of contracts unless caused by prolonged force majeure events; take-or-pay clause for significant contracted volumes, stipulating that buyers should pay for all contracted gas, whether offtaken or not, but may later withdraw the unconsumed volumes at a surcharge upon receiving the minimum annual volumes contracted for the specified year. In essence, the long-term contracts are service contracts that allow buyers to exercise flexibility with regard to both daily and annual volumes supplied, while the seller has an obligation to deliver the pre-paid take-or-pay volumes. Moreover, long-term contracts provide a guarantee of gas deliveries over a substantial period of time. Spot gas, meanwhile, is a fundamentally different product, which makes direct comparisons between contract and spot prices unjustified. Contracts which are partially oil-indexed, however, continue to be relevant. Oil indexation is a long-term business planning tool that provides for investment continuity and stability in the gas sector. Average gas selling price beyond FSU (net of VAT, including excise tax and customs duties) Year ended December 31 2016 2017 2018 2019 2020 RUB/1,000 m3 11,763.3 11,670.5 15,499.5 13,613.0 10,355.9 USD*/1,000 m3 176.0 200.2 246.4 210.6 143.0 EUR*/1,000 m3 159.0 176.8 209.1 188.2 124.9 * The data were not derived from financial statements and were calculated based on exchange rates as of the end of the relevant period. European gas market The dynamics of Russian gas supplies to Europe depend on a number of factors, including rates of economic growth and indigenous gas production, prices for other energy sources – particularly in the power industry – and gas prices in other international markets. Natural gas sales by Gazprom Group in Europe beyond FSU in 2020, billion cubic meters Country Volumes Austria 10.6 Belgium 1.3 Bosnia and Herzegovina 0.2 Bulgaria 2.3 Croatia 1.8 Czech Republic 4.0 Denmark 1.8 Finland 1.6 France 14.0 Germany 41.6 Greece 3.1 Hungary 8.6 Italy 20.9 Netherlands 48.1 North Macedonia 0.3 Poland 9.7 Romania 1.0 Serbia 1.4 Slovakia 7.6 Slovenia 0.4 Spain 0.8 Switzerland 0.4 Turkey 16.4 United Kingdom 8.9 Enhancing reliability of gas supplies to Europe How is gas stored and what are UGS facilities Gazprom implements a set of measures to enhance the reliability of its gas supplies to European consumers, including systematic efforts for contracting gas transmission capacities, optimizing and redistributing the contracted capacities, executing swap deals, and mitigating flow interruptions and other emergencies. With a view to further improve supply reliability, Gazprom initiated the Nord Stream, Nord Stream 2 and TurkStream gas transmission projects. Nord Stream, the first gas pipeline in history to establish a direct connection between the Russian and European gas transmission systems, reached its design capacity in 2012. Nord Stream 2 is a new export gas pipeline to Europe across the Baltic Sea. The construction project is ongoing. TurkStream is a new export gas pipeline stretching from Russia to Turkey across the Black Sea. The first string of the gas pipeline is intended for Turkish consumers, while the second string is meant to deliver gas to southern and southeastern Europe. Construction of TurkStream started in 2017. Gas supplies via the pipeline began in January 2020. The use of underground gas storage (UGS) facilities in Europe also helps considerably increase the stability of export supplies. Share © 2003–2021 Gazprom Contact us Site map Accessibility Print... The website of Gazprom uses cookies. By continuing to use this site, you agree to allow us to use cookies in your browser with a view to improving user experience. 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