Page 4 - FSUOGM Week 48 2021

FSUOGM COMMENTARY FSUOGM

Gazprom says it will use windfall

gas crisis cash to up boost capex

Gazprom has raised its investment plan for 2022 and is likely to increase it

further over the course of next year

RUSSIA CAPITAL spending levels at Russia’s Gazprom allocated to the Amur gas processing plant that
are once again creeping upwards, as the com- handles these supplies.
WHAT: pany prepares to ramp up gas supplies to China Arctic spending
Gazprom plans to boost and expand development in the Russian Arctic Moving up north, Gazprom said some of
capex next year. The state-owned gas supplier has abandoned its the funds would go towards additional devel-
promise of less than two years ago to be more opment at fields on the Yamal Peninsula. Yamal
WHY: fiscal prudent, spurred on by soaring gas prices is tipped to become Russia’s biggest hub for gas
The company has that have led to a spike in its profits. production. This will come on the back of field
abandoned its fiscal Under a programme announced on Novem- development by Novatek, which is ramping up
restraint following record ber 26, the company plans to invest RUB1.76 LNG exports to Asia and Europe, and Gazprom,
profits off the back of the trillion ($23.3bn) in 2022, up from a target of which has set sights on expanding pipeline sup-
gas crisis. RUB1.185 trillion for this year. Gazprom’s actual plies to Europe and sending additional volumes
capital expenditure next year is expected to come to China via a planned second pipeline through
WHAT NEXT: to RUB1.4 trillion, but additional funds in the Mongolia.
If ambitious projects like investment programme will go towards long- The only Gazprom field on Yamal currently
a second gas pipeline term financial investments and the purchase of in production is Bovanenkovo, but this project
to China go ahead, long-term assets, its management has said. Bor- alone has a capacity of 115 bcm per year, most of
Gazprom's spending rowing from outside the company is expected to which is shipped to Europe. Gazprom kicked off
levels will remain high for total RUB272.8bn in 2022. development drilling at a second, neighbouring
years to come. These funds will partly be allocated towards field called Kharasaveyskoye in June last year,
additional upstream development in Eastern and this will contribute a further 32 bcm per year
Siberia. Gazprom has been sending gas to China of supply under its first, 230-well phase.
since December 2019 and is now investing in Kharasaveyskoye is due on stream in 2023,
expanding supply at the Chayandinskoye field according to the official schedule, although
in the Yakutia region, which at full capacity is recently Gazprom has spoken of fast-tracking
expected to flow 25bn cubic metres (bcm) per some of its upcoming upstream projects in light
year of gas. In the mid-2020s it also intends to of the supply crunch in Europe.
commission the Kovyktinskoye field in the Another of Gazprom’s largest fields on Yamal
neighbouring Irkutsk region, which will have a is Tambey, which the company has teamed up
similar peak capacity. with private partner Rusgasdobycha to develop.
Gazprom also has to fund further develop- The pair formed a joint venture for the project in
ment of the Power of Siberia pipeline that deliv- November, and the next step will be the transfer
ers this gas to China. And investment will also be of licences to the partnership, which should take

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