Contracts for gas supplies to and transit across Belarus extended until 2021

December 31, 2019A working meeting of Alexey Miller, Chairman of the Gazprom Management Committee, with Vladimir Semashko, Ambassador Extraordinary and Plenipotentiary of the Republic of Belarus to the Russian Federation, and Viktor Karankevich, Belaru…



Gazprom to continue supplying gas to Armenia on same terms in 2020

December 31, 2019Gazprom Export and Gazprom Armenia signed an additional agreement to the contract for Russian gas supplies to the Republic of Armenia.
In accordance with the agreement, the price of natural gas at the border between Georgia and Armenia…



Gazprom and Moldovagaz extend contracts for gas supplies and transit

December 31, 2019Gazprom and Moldovagaz signed the documents to extend the existing contracts for gas supplies and transit.

Moldovagaz is a joint Russian-Moldovan company set up by Gazprom, the Moldovan Government, and the Ministry of Ind…



Alexey Miller: major package deal with Ukraine restores balance between parties’ interests

“Following five days of continuous bilateral negotiations, final decisions and arrangements have been reached in Vienna.

At the same time, a whole set of agreements and contracts has been signed, and one can fairly say that these arrangements represent a major package deal that has restored the balance between the interests of the parties.

These documents are coming into effect today, ensuring the transit of Russian gas across Ukraine after December 31, 2019.

Gazprom has done everything in its power, once again proving its reputation as a responsible supplier and a reliable partner.”


Package of documents signed for Russian gas transit across Ukraine to continue beyond 2019

December 30, 2019

Pursuant to the Protocol of December 20, 2019, Gazprom, Naftogaz of Ukraine, Gas Transmission System Operator of Ukraine and the Ministry of Justice of Ukraine signed a package of documents providing for Russian gas transit across Ukraine to continue beyond December 31, 2019.

Gazprom and Naftogaz of Ukraine concluded an irrevocable settlement agreement stipulating that all outstanding arbitration and judicial claims between the parties be discontinued and that in the future the parties renounce any and all possible claims under the supply and transit contracts dated January 19, 2009. Prior to the signing of the settlement agreement, Gazprom had paid USD 2.9 billion to Naftogaz within the timeframes specified in the Protocol in accordance with the ruling of the Stockholm Arbitration Court.

Gazprom and the Ministry of Justice of Ukraine signed an irrevocable amicable agreement to cancel all of Ukraine’s ongoing and potential future claims against the Company arising from the resolution of the Antimonopoly Committee of Ukraine.

Gazprom and Naftogaz entered into an agreement to arrange for the transmission of gas across Ukrainian territory. Naftogaz is thus acting as the transit organizer and assuming the associated risks.

Gas Transmission System Operator of Ukraine signed a transport agreement with Naftogaz and an inter-operator agreement with Gazprom.

The transit organizer has the obligation to book gas transmission capacities in Ukraine for a five-year period to transmit a total of 225 billion cubic meters of gas, including 65 billion cubic meters in 2020 and 40 billion cubic meters per year in 2021–2024.


Gas reserves of Yamal’s Kruzenshternskoye field raised to 2 trillion cubic meters

December 27, 2019

  • Gazprom boosted Yamal gas production center’s resource base.
  • Kruzenshternskoye field’s gas reserves were increased by 360 billion cubic meters.
  • Hi-tech directional well was built.
  • Subsurface use right was granted for Sopochny block in YaNAA’s Tazovsky District.

The Federal Agency for Mineral Resources approved the expert opinion of the State Reserves Commission with regard to the calculation of hydrocarbon reserves in the Kruzenshternskoye gas and condensate field. The field forms part of the Bovanenkovo production zone, the basis for the development of a major gas production center in the Yamal Peninsula.

As a result of geological exploration carried out by Gazprom, the amount of Kruzenshternskoye’s recoverable gas reserves in the С1+С2 commercial categories was increased by 360 billion cubic meters. Therefore, the field’s total gas reserves went up by 22 per cent from 1.64 trillion to 2 trillion cubic meters.

The Kruzenshternskoye field is unique in terms of the amount of its hydrocarbon reserves. It is located to the west of the Bovanenkovskoye field, partly onshore in the Yamal Peninsula but mostly in the waters of the Kara Sea.

In order to collect more precise data about the reserves of the Kruzenshternskoye field, Gazprom built a hi-tech directional exploration well from the coast of Sharapov Shar Bay. The well is 4.9 kilometers long, including a 3.9-kilometer seaward deviation. When constructing the sophisticated structures of the well, the Company used cutting-edge drilling technologies and solutions in the field of geophysical research.

In addition, Gazprom won the auction for the right to use subsoil reserves with the purposes of geological prospecting, hydrocarbon exploration and production within the Sopochny block (Tazovsky District, Yamal-Nenets Autonomous Area). As estimated by the Company, the block’s resource potential exceeds 500 million tons of fuel equivalent.


The Bovanenkovo production zone in the Yamal gas production center includes three fields: Bovanenkovskoye, Kharasaveyskoye, and Kruzenshternskoye (the licenses are held by the Gazprom Group).

Geological exploration at the Kruzenshternskoye field was carried out by Gazprom Geologorazvedka. In addition to an increase in gas reserves, the field’s recoverable condensate reserves (С1+С2 categories) skyrocketed from 2.7 million to 11.6 million tons.



Speech by Alexey Miller at conference call on occasion of New Year’s Eve

Dear colleagues,

Today, we are taking stock of the year 2019. This year has already become a landmark in the history of the gas industry. A tremendous amount has been achieved.

First and foremost, the Power of Siberia gas pipeline has come onstream. As you know, on December 2, the Company launched Russian pipeline gas supplies to China. This is a market with enormous potential.

Power of Siberia is one of the most ambitious projects in the world gas industry. In a mere five years, we created a gas production center in Yakutia from the ground up. We laid a state-of-the-art gas pipeline from there. As you know, the work was carried out in extreme conditions yet to a high standard and ahead of schedule. Without a doubt, it was a huge victory achieved through the work of the whole team of Gazprom.

An important mission of Power of Siberia is to expand gas infrastructure in the east of our country – in Russia’s Far East and Yakutia. Needless to say, natural gas means a higher quality of life. Most notably in rural areas. Together, we are conducting this work all around Russia. Today, Gazprom is working in 69 regions of the Russian Federation, supplying gas to consumers in the domestic market. This year, we have brought pipeline gas to another 140 inhabited localities. More than 1,700 kilometers of gas pipelines have been built as part of our program for gas infrastructure expansion in the Russian Federation.

In the Kaliningrad Region, we have brought into operation an offshore LNG receiving terminal and the Marshal Vasilevskiy floating storage and regasification unit. We have created a totally independent and reliable route for supplying gas to the westernmost region of our country.

This year, as usual, we are providing our domestic and foreign consumers with reliable deliveries of gas in the required amounts. Exports to Europe are expected to total 198.8 billion cubic meters of gas by the end of this year. As you know, this will be one of the best totals in the history of the Company. I would like to note that, as of this December, the current daily volumes of deliveries to Europe are exceeding those of the same period last year.

In a few days, we will start supplying gas via the TurkStream offshore gas pipeline. We also have the completion of the Nord Stream 2 construction project ahead of us. The new offshore trunklines will improve energy efficiency in European countries. They will also help Europe achieve its environmental goals.

As you are well aware, last week marked the signing of a protocol on gas cooperation with Ukraine from 2020 onward. The document will allow the parties to, first and foremost, restore the balance between their interests and reduce the risks related to the transit of Russian gas to Europe.

The reliability of our gas supplies to Russia and abroad is underpinned by a robust resource base and a powerful production complex. By the end of 2019, we will have produced some 500 billion cubic meters of gas.

Together, we are steadily expanding the Yamal gas production center. In March, right on schedule, we started the full-scale development of the Kharasaveyskoye field. The field will come onstream as early as 2023 and will provide consumers with gas for more than 100 years.

Simultaneously, we continue to enhance the northern gas transmission corridor in order to transmit the gas produced in Yamal. Within the Ukhta – Torzhok 2 gas pipeline, we are preparing the launch of Novoyubileynaya, the first of the pipeline’s seven compressor stations.

We are building cutting-edge hi-tech facilities along the whole production chain. A great case in point is the Amur Gas Processing Plant (GPP), which will become one of the world’s largest. The project is 54 per cent complete, which means that it is already halfway through. The successful signing of project finance documentation for the Amur GPP, which took place this week, clearly demonstrates the high quality of our key investment projects.

In northwestern Russia, namely in Ust-Luga, we have launched the project to build an integrated complex for gas processing and liquefaction. It will be the core of a powerful, one-of-a-kind industrial cluster. The technological concept we have chosen will ensure excellent economic efficiency of this project.

Dear colleagues,

This year, we have made major decisions to improve the corporate structure of Gazprom. A lot of work has been done. And it is not yet finished. Our goal is to increase the systemic efficiency of Gazprom. The focus will primarily be on the operational and financial results.

The day before yesterday, the Gazprom Board of Directors approved the new revision of the Company’s Dividend Policy. Now, dividend amounts are inextricably linked to financial results under IFRS. Our target level is at least 50 per cent of the net profit under IFRS, and we will reach that level in the next three years. This approach is fully consonant with the interests of our shareholders and investors.

Since the start of these transformations, Gazprom’s capitalization has increased 1.7-fold and is now as high as USD 97 billion. Gazprom is now the largest Russian company, the number one company in terms of capitalization. Nevertheless, our shares have considerable potential for further growth.

In the power sector, 2019 marked the completion of the large-scale program under the capacity supply agreements. Over the course of eleven and a half years, Gazprom Energoholding brought into operation advanced facilities with a total capacity of 9 GW.

Our oil subsidiary – Gazprom Neft – is very close to reaching its strategic goal for production, i.e. 100 million tons of oil equivalent per year.

This year, the company commenced production activities in the oil rim of the Chayandinskoye field. And now, we have a video link with Igor Krutikov, Director General of Gazprom Dobycha Noyabrsk, and Vladimir Krupenikov, Director General of Gazpromneft-Zapolyarye.

Video link with Chayandinskoye field

Igor Krutikov: Good afternoon, dear Mr. Miller! Good afternoon, dear colleagues! I am happy to send my greetings to you from the Chayandinskoye oil, gas and condensate field. A little over three weeks ago, we commenced gas supplies to China via the Power of Siberia trunkline, and now we are ready to start feeding treated oil into the Chayanda – Eastern Siberia–Pacific Ocean oil pipeline.

The pre-development project is underway at the oil rim of the Chayandinskoye field, and the construction of key infrastructure and process lines for oil production and treatment has already been completed. Oil producing wells with treatment equipment and about 17 kilometers of in-field pipelines are already in active operation.

Also ready for operation are a sales oil treatment unit with an annual capacity of 131,000 tons, the Chayanda – Eastern Siberia–Pacific Ocean oil pipeline with a length of 72 kilometers and annual capacity of over 2 million tons, and the custody transfer point for the Eastern Siberia–Pacific Ocean pipeline system.

The oil rim is being developed by Gazpromneft-Zapolyarye under an operating agreement with Gazprom Dobycha Noyabrsk. Let me now pass the floor to Vladimir Krupenikov, Director General of Gazpromneft-Zapolyarye.

Vladimir Krupenikov: Good afternoon, dear Mr. Miller! Good afternoon, dear colleagues! Let me briefly outline the oil production and supply scheme arranged between the Chayandinskoye field and the Eastern Siberia–Pacific Ocean pipeline system.

Seven wells are currently active at the field, and the oil is fed from them into a treatment unit where it reaches marketable parameters. After that, tank trucks bring this oil to a comprehensive gas treatment unit where oil is mixed with gas condensate and then transmitted to the custody transfer point via the Chayanda – Eastern Siberia–Pacific Ocean oil trunkline. The oil is further sent to the Eastern Siberia–Pacific Ocean pipeline system.

The full-scale development of the oil rim at the Chayandinskoye field will commence in 2020. In the longer term, the Chayanda oil cluster will produce about 3 million tons of oil equivalent per year.

Igor Krutikov: Mr. Miller, we are ready to start feeding the treated oil into the Chayanda – Eastern Siberia–Pacific Ocean pipeline. Please give your permission to commence the supplies.

Alexey Miller: Permission granted.

Igor Krutikov: Dispatcher, the command is to start feeding the treated oil into the Eastern Siberia–Pacific Ocean pipeline system.

Dispatcher: The valve at the connection point to the oil trunkline is now open.

Igor Krutikov: Dear Mr. Miller! The Chayandinskoye field has started feeding its oil into the Eastern Siberia–Pacific Ocean pipeline system.

Alexey Miller: Mr. Krutikov and Mr. Krupenikov, thank you! Thank you for delivering a timely and high-quality result.

Video link ends.

Dear colleagues,

The targets set for this year have been achieved thanks to the hard and dedicated work of Gazprom’s team. And of course it would not be possible without their highly responsible attitude and professional excellence.

I would like to wish you a merry Christmas and a happy New Year!

I wish you and your loved ones happiness, good health, a flourishing life, and all the best!

Now, let us go on with our work.


Russian industrial enterprises actively contributing to Gazprom’s goals

December 24, 2019

  • Economic effect from Gazprom’s import substitution efforts in 2016–2018 is estimated at RUB 20.7 billion.
  • Full range of key equipment created for operating offshore fields.

The Gazprom Board of Directors took note of the information about the engagement of Russian industrial and machine-building enterprises in the implementation of the Company’s strategic goals.

Gazprom is actively employing various organizational mechanisms to enhance its cooperation with domestic enterprises. These mechanisms include long-term contracts with manufacturers for batch production, supply and maintenance of hi-tech equipment; roadmaps signed with Russian regions to increase involvement of local enterprises; agreements and cooperation programs with leading metal and pipe companies, state-run corporations and the military-industrial complex. In total, Gazprom signed more than 60 instruments of this kind.

It was pointed out at the meeting that the systematic steps Gazprom has made in this direction are producing comprehensive results. The Company is further improving its operational efficiency: the economic effect from the import-substituting technologies, equipment and materials applied at the Gazprom Group’s facilities in 2016–2018 is estimated at RUB 20.7 billion. In addition to that, the investments made by Russian companies in upgrading and creating new production facilities have already reached RUB 17.8 billion under long-term contracts with Gazprom alone.

Among the results of the steps taken is the creation of the first domestic equipment prototypes for subsea hydrocarbon production systems through joint efforts of Gazprom, the Russian Ministry of Industry and Trade, research institutes and machine-building enterprises. A full range of the key equipment for operating offshore fields was presented at the St. Petersburg International Gas Forum in October 2019.


Board of Directors reviews influence of 2019’s events on global energy market outlook

December 24, 2019

The Gazprom Board of Directors took note of the information concerning the impacts of the events of 2019 on the long-term outlook for the global energy market.

It was highlighted that the ongoing global growth in natural gas consumption is one of the chief trends of 2019.

China continues to demonstrate significant growth. In 2018, the country’s gas consumption went up by 18 per cent. By the end of 2019, gas consumption in China may rise by 10 per cent, considerably exceeding 300 billion cubic meters. It was noted at the meeting that the launch of the Power of Siberia gas pipeline, which took place on December 2, allows the Company to provide reliable gas supplies from Russia to China and strengthens Gazprom’s positions in this promising gas market.

In Europe, indigenous gas production decreased at an accelerated pace throughout 2019. It was stressed that Gazprom is a leading supplier of gas to Europe, covering over a third of the region’s demand and capable of taking further steps to enhance energy security in European countries.

The meeting participants pointed out that the events of 2019 had no tangible impact on the long-term outlook for the global energy market. Gazprom’s positions will remain stable in the long run thanks to, inter alia, enormous gas reserves, well-developed production and transmission infrastructure, and the ongoing effort to diversify export areas and routes.


Gazprom Board of Directors approves investment program and budget for 2020

December 24, 2019

  • Gazprom’s overall amount of investments for 2020: RUB 1,104.7 billion.
  • This budget will provide full coverage of Gazprom’s liabilities without deficit.

The Gazprom Board of Directors took note of the Company’s preliminary operating results for 2019 and the projected investment program and budget (financial plan) for 2021–2022.

In addition, the Board of Directors approved the investment program and budget (financial plan) of Gazprom for 2020. The figures of the investment program did not change compared to the version endorsed by the Gazprom Management Committee in December this year.

As per the investment program for 2020, the overall amount of investments will be RUB 1,104.724 billion, which is RUB 217.858 billion less than was envisaged in the revised investment program for 2019. Of the amount earmarked for 2020, RUB 933.403 billion is intended for capital investments, RUB 89.972 billion for the acquisition of non-current assets, and RUB 81.349 billion for long-term financial investments.

Pursuant to the approved budget (financial plan) of Gazprom for 2020, the financial borrowings (without intra-Group borrowings) will total RUB 557.769 billion. The newly-adopted financial plan will provide for a full coverage of the Company’s liabilities without a deficit. Decisions on debt financing under the Borrowing Program will be made on the basis of the market conditions, liquidity and Gazprom’s financing needs.

It was noted at the meeting that the Company remains committed to a well-balanced financial strategy. Gazprom’s budget for 2020 was drafted on the basis of conservative macroeconomic indicators. Funds were set aside to cover additional costs in case of unfavorable developments in the global gas market and international capital markets. Particular attention was paid to reducing operating and investment costs at Gazprom and its subsidiaries. The decision on the scope of the Borrowing Program took into account the need to keep the debt burden at a comfortable level.

This approach allows Gazprom to maintain a high level of financial sustainability.


The main investments under Gazprom’s investment program for 2020 cover the Company’s priority projects of strategic importance, including the development of the gas production centers in the Yamal Peninsula and eastern Russia, the gas transmission system in the northwest of the country, further construction of the Power of Siberia gas pipeline, and projects securing gas balance in peak periods.