Gazprom has announced the conclusion to its gas auction. The company concluded forty deals with 15 European traders, for a total volume of over 1 billion cubic metres being sold, over one-third of the volumes initially offered.

“Regardless of the fact this is not the best time for an auction considering market conditions, we have managed to sell an extra 1.23 billion cubic meters for a total amount of over €250mn,” says deputy chairman Alexander Medvedev. “We are fully satisfied with both the quality and quantity of Gazprom’s performance in this auction,” he adds.

The appetite of European buyers for Russian gas is set to keep increasing, as the company forecasts an 8% increase in European exports by 2017. “This reflects the reality of energy interdependence in the Russia-EU relationship, particularly for gas. As much as Europe talks of diversifying from Russian gas and Russia talks of a ‘pivot’ to the east, both sides need each other, and the market is driving increased trade now in the run-up to winter heating season,” says Andrew Neff, principal analyst, petroleum sector risk group, IHS Energy, adding “I would say this is a case where market supply-demand realities trump political rhetoric.”

Politics in Turkey are however affecting Gazprom’s business, delaying the works on the Turkstream pipeline, which is supposed to offer an alternative route to supply gas to Europe, bypassing Ukraine. The intergovernmental agreement needed to start the works on the project won’t be signed until a new government is formed in Turkey, where elections are set to be held on November 1. According to Medvedev, Gazprom is looking to both European and non-European lenders to finance the project.