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UGSS balance

Deciphering the gas balance in the UGSS is notoriously difficult. Gazprom repeatedly changing the breakdown hardly helps, but the reality is that flows in the system have become increasingly complex, including substantial volumes that are purchased by Gazprom or shipped on behalf of others.

Renaissance Capital

20 June 2019

Russian oil & gas

Deciphering the gas balance is challenging, given the growing role of non-Gazprom gas in the system

Figure 107 below summarises our best attempt at untangling this riddle.

Figure 107: 2003-2018 UGSS balance, bcm

	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018
Total gas transportation system inflow	672	684	700	718	707	714	590	661	683	666	659	628	603	623	672	693
UGTS inflow	622	635	647	661	655	669	552	614	631	615	621	589	574	574	623	639
Shipments of gas owned by Gazprom	539	548	550	554	543	548	486	542	549	519	510	468	453	445	485	510
Shipments of gas owned by third parties	83	88	97	107	112	122	67	73	82	96	111	121	122	129	138	129
Withdrawals from Russian UGSFs	40	38	43	48	42	36	30	41	47	44	33	33	24	45	46	52
Decrease in GTS reserves	10	11	10	9	10	9	7	6	5	7	6	6	4	4	3	2

Total gas transportation system outflow	672	684	700	718	707	714	590	661	683	666	659	628	603	623	672	693
Pipeline deliveries to customers in Russia	327	334	340	352	356	353	336	355	366	362	355	357	342	352	354	365
of which Gazprom's	292	297	307	316	307	287	272	262	265	262	237	220	200	196	230	240
of which others	36	36	33	36	49	66	64	93	100	101	118	137	143	156	124	125
Pipeline deliveries outside of Russia	234	246	251	255	247	251	196	209	218	209	220	196	197	209	232	235
Europe	135	149	154	151	151	168	153	151	154	139	162	147	159	179	194	202
FSU countries	99	97	97	104	97	84	43	58	64	71	59	50	38	30	38	33
Addition to Russian UGSFs	49	43	46	50	43	52	16	48	48	44	38	35	27	25	44	49
GTS’ own technological needs	51	52	52	52	50	50	36	44	46	41	41	33	32	32	38	41
Increase in GTS reserves	11	10	11	9	11	9	7	6	6	10	6	7	4	5	4	4

Note: Excludes non-Russia storage movements and re-sold volumes in export markets.

Source: Gazprom, Renaissance Capital

In our view, the most salient points on the supply side are:

▪Gazprom produced 474bcm last year, which includes its 10bcm share of Yuzhno-Russkoye and 9bcm share of Sakhalin-2 production.

▪We estimate 8bcm was sold or consumed locally before reaching the UGSS. Gazprom has not reported this figure, and our estimate is therefore subject to change.

Total supplies of 693bcm

510bcm of Gazprom’s or Gazprompurchased gas

▪We estimate Gazprom also purchased 21bcm from Central Asian and 22bcm from other Russian producers for delivery to customers.

▪This means Gazprom shipped 510bcm of gas that it has either produced or acquired from third parties.

▪Other Russian producers also shipped 129bcm out of their total production of 251bcm via the UGSS.

▪This means 122bcm of Russian gas was consumed locally, shipped directly to customers (such as in the form of LNG) or merely flared last year.

▪Storage facilities supplied 52bcm of required seasonal demand, while UGSS capacity released 2bcm.

▪Total supplies were 693bcm.

On the demand side, we note the following:

▪Gazprom delivered 365bcm to Russian customers.

▪Of this, we estimate Gazprom’s owned gas accounted for 240bcm (this figure includes third-party gas that Gazprom re-sells).

▪Non-FSU deliveries were 202bcm.

▪33bcm was shipped to FSU markets.

365bcm delivered to Russian customers

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Renaissance Capital 20 June 2019

Russian oil & gas

▪Deliveries into storage in Russia were 49bcm.

▪The pipeline system itself consumed 41bcm.

▪UGSS capacity absorbed 4bcm.

▪Total deliveries were 693bcm.

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