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By John Helmer in Moscow

Land-based delivery of Gazprom’s natural gas is more than holding its own in the European gas market against competing seaborne deliveries of liquefied natural gas (LNG), according to a report from Gazprom in Moscow yesterday. This says that Gazprom’s exports to the European Union (EU) increased by 19.4% in the third quarter of this year, compared to the second quarter. This was also up 9.5% on the same period of 2008, and 8% above the the level for Q3 2007.

The figures are a sharp demonstration that Gazprom is managing to regain its share of Europe’s gas market with lower prices than the LNG tankers from Qatar, Algeria and Egypt can deliver through the Adriatic and Mediterranean. The Italian market is leading this new trend, with 22% growth in Gazprom purchases compared to last year. This is despite the relative ease of access for tankers to deliver LNG to Italian port terminals at Isola di Porto Levante (Adriatic), Panigaglia (Mediterranean), and Brindisi (Adriatic).

For this final quarter, Gazprom also says it plans to lift its export deliveries to the EU by another 25% over the third quarter; this will make 45.3 billion cubic metres.

A Moscow gas analyst and consultant to Gazprom explains Gazprom’s gains as the result of short-term depletion of European gas storages, the seasonal necessity to refill them ahead of winter, and the possible political preferences of the Italian and German governments in favour of Gazprom. These factors, he believes, dictate buying Gazprom gas even if it is higher priced than competing LNG or land-delivered spot market natural gas. “Gazprom tries to sign only long-term contracts with the take-or-pay condition,” the source said. “Its share of the European market during the crisis has been 33%. Europe traditionally prefers gas from Norway, because it’s a European supplier, while all other suppliers are treated according to the market situation.”

As for the forecasts from Anglo-American experts that Gazprom faces a relentless decline in volume of gas demand from European consumers, and a corresponding shrinkage in its EU market share, the latest data suggest that the bad news is being rigged, also for political reasons. A series of recent investigative reports by Terry Macalister of the Guardian in London has revealed that rigging of demand and supply forecasts of crude oil demand in Europe, and globally, may driven by the International Energy Agency (IEA) in Paris.

According to Macalister, a new Swedish academic report describes the IEA oil forecast as [quotes here] a political document developed for consuming countries with a vested interest in low prices… IEA whistleblowers had expressed deep misgivings about the way energy statistics were being collected and interpreted at the Paris-based organisation. Insiders questioned whether US influence and fears of stock market ‘panic’ were encouraging the IEA to downplay the potential for future oil scarcity.” IEA is reported to have dismissed these claims as “groundless”.

At a conference in Moscow on Tuesday, Gazprom’s deputy chief executive and head of exports, Alexander Medvedev was critical of the IEA’s recently published World Energy Outlook claim that the European gas market will have a surfeit of low-priced gas through 2015. According to Medvedev, Gazprom’s forecast is for scarcity and demand-driven pricing to return to the European market at least three years earlier, by 2012.

This paper war over forecasts of supply, demand, export volumes, and price trends leaves the key questions unsettled. According to Medvedev, gas consumption in Europe this year will fall by 5% to 7%, compared to 2008. Gazprom is also conceding that European customers bought at least 8 bcm of gas less than required under the company’s take-or-pay contracts. But next year, Gazprom insists, exports will rise to more than offset this year’s declines, and prices also.

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