Russian gas giant Gazprom expects to export 60 billion cubic metres to Europe in the first half of the year, adding that shipments for the full year should reach 140 Bcm, a dip on last year’s figures.

The figures were announced in a statement released by the company. Gazprom officials told Reuters earlier that its exports for 2008 totalled 184.4 Bcm.

The company’s export chief Alexander Medvedev said in a statement that export sales are expected to fall to $40 billion this year. Last year, the company earned $65 billion.

Medvedev added Gazprom expects export prices to exceed $280 per 1000 cubic metres this year.

Speaking later, Medvedev said he expected gas demand to pick up in Europe from April, i rebuffing accusations that rigid pricing was to blame for an expected 40% plunge in export sales this year.

“When there is a global storm there is no safe haven anywhere,” Reuters quoted Medvedev as saying at a news conference.

He added that the major impact on exports did not come from the crisis but from the fact that spot gas prices were twice as low as gas under long-term contract.

European customers, which get a quarter of their imports from Gazprom, have been buying more alternative fuels and cutting imports of gas under long-term deals, waiting until gas prices catch up with lower oil prices.

Medvedev also said Algeria and Nigeria suffered from the same problem in the fourth quarter of last year and the first quarter of this year, adding that Norway had increased supplies.

“But we don’t see any reason to panic or for pessimism,” said Medvedev, adding he believed Gazprom will boost its European market share in the future.

“Norway has no special flexibility. The structure of their price formula is such that the spot segment is prevailing,” he said.

“The advantage of our contracts is in price predictability,” he said. “It doesn’t make any sense to halve prices to see offtake picking up by, let’s say, 3%”.

“And starting from April we are seeing gas imports are beginning to exceed our expectations,” he added.

Gazprom’s exports have been crimped by an ongoing row with Ukraine over payment for gas supplies. Most of the gas Russian sends to Europe is exported via trunklines which cross Ukraine.

In January this year, flows to Europe trickled to a halt for almost three weeks after Gazprom shut off supplies to Ukraine. There are fears that a new shut in is looming after Kiev admitted earlier that it cannot afford to pay its bill for July’s gas supply.

(Upstream Online)