"Gazprom" hopes to profit from gas supplies to China
In an interview with The Wall Street Journal deputy chairman of the Russian gas holding Andrey Kruglov said that even with the current price for energy supply gas to China will be profitable. He noted that the supply of gas to China along the eastern route through the pipeline "Power of Siberia" will start only in 2019, by which time the price situation on the market should be significantly improved. "Gazprom" expects to increase the share of Asia in their deliveries to 30% by 2025
In contrast to the "Rosneft", "Gazprom" slept China and the Asian market. Negotiations were conducted on the supply of 2004 was only a political decision on the reorientation of Russian exports to Asia made the gas holding to start an active expansion into the Chinese market. As you know, the price of gas on the Chinese contracts tied to oil prices in Asia, which are not very different from the quotations Brent. In 2019 the oil with a high probability to be more expensive than it is now, so - export of "Gazprom" will also be more profitable. That is, the company's management rights. In addition, a significant devaluation of the partially reduced investment costs of the company.
At the same time, the market is worried about now is not China or even the mythical risks of gas supplies from the US to Europe. The weak point of "Gazprom" - a Ukrainian transit. "Gazprom" can not feel comfortable until Ukraine is able to dictate its terms. However, none of the possible solutions to the issue of gas transit to Europe does not eliminate the risk entirely Ukrainian transit.
"Gazprom" remains the most cheap Russian blue chip. In addition to the risks Ukrainian transit affects weak corporate governance of the company. In this respect, "Gazprom" loses much of "Rosneft" and "Lukoil".