Gazprom Exports Surged in March Ahead of Ruble Payment Deadline

(Bloomberg) — Gazprom’s (MCX:) daily average gas flows to key foreign markets soared in March to the highest in seven months as buyers boosted purchases amid concerns Russia may cut off supplies.

Europe gets about 40% of its gas from Russia and is already grappling with fallout from this winter’s supply squeeze and low inventories that sent prices to record highs. Clients on the continent, the single largest market for Russian , were trying to acquire as much of the fuel as possible ahead of an April 1 deadline when Gazprom starts accepting only rubles for its supplies to the European Union and a number of other nations Russia labels as “unfriendly.” 

Concerns of an immediate supply disruption eased on Thursday after Russia published details of the switch, and European officials indicated the changes will in practice likely not affect supplies. Still, France, Germany and Austria are preparing contingency plans in case of a potential cutoff.

Gazprom exported an average of 494 million cubic meters of gas a day to countries outside the former Soviet Union last month, according to Bloomberg calculations based on the company’s data. That’s 17% more than the average for February, yet some 16% lower than the level a year before.

The Russian gas producer said it’s continuing to supply the fuel in line with requests from consumers and is in full compliance with its contractual obligations.

Gazprom doesn’t provide a detailed export breakdown by country, making it difficult to assess supplies to Turkey and most of Europe, the key market for the company’s foreign deliveries. Russian daily flows toward the borders with European nations have averaged 360 million cubic meters on March 1-27, compared with 329 million cubic meters per day in February, according to Gazprom data. 

The Russian producer said it increased gas flows to some key European clients in March compared to the level a year before, including deliveries to Italy, Poland and Turkey.

Gazprom’s gas output averaged 1.47 billion cubic meters a day in March, showing a decline for a second consecutive month, according to Bloomberg calculations. 

In the first three months of the year, Gazprom’s exports to key foreign markets dropped 27% from the same time last year to 38.5 billion cubic meters, the Russian producer said. Production over the first quarter stayed roughly flat at 135 billion cubic meters, it said.