According to Interfax, Minister of Energy Alexander Novak said that Russian gas producers might reach export netback parity in 2017-18. In particular, he said that this could happen due to a decrease in international prices, caused by oversupply. The minister noted that competition was increasing, particularly due to shale gas developments.
The period of time Novak mentioned is in line with our forecast: we estimate that export netback parity is to be reached in 2017. The news supports our view that domestic gas tariffs regulated by Federal Tariff Service would continue to grow, but only in the near and medium term. We do not think the news will trigger any market reaction.
Dmitry Loukashov, Alexander Kirevnin, Ekaterina Rodina, Elena Kopylova, Mikhail Zarkhi
VTB Capital analyst
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