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estimated to increase to RUB1.6trln in 2021. Capex should increase to RUB1.507trln vs. RUB1.494trln in 2020, in part due to spending on gasification. The liquidity cushion should increase from RUB1.052trln in 2020 to RUB1.650trln. FCF is forecast at RUB174bn vs. negative RUB61bn in FY20. ...on debt as well. The company cut its borrowing plan by RUB100bn vs. the initial plan set last year. Gazprom is aiming to bring ND/EBITDA to below 2.0x, and the long-term target is 1.2x. Management thinks 1.8x is possible by YE21. Gazprom uses $170/mcm in its budget for the non-FSU export price. In 1Q21, the contract price was $184/mcm, so the full-year price could be $200-206/mcm.
Russian gas giant Gazprom is considering construction of a liquefied natural gas (LNG) production facility at the Amur gas refinery, Deputy CEO Vitaly Markelov said on April 26. The launch of two debut production lines at the 950 billion ruble Amur gas refinery is scheduled for April–June 2021 and of the third line for December 2021. All the six lines planned now will be commissioned by December 2024, and the plant’s production capacity will amount to 38 billion cubic meters of methane, 2 million tonnes of ethane, 1.7 million tonnes of liquefied petroleum gas, and 60 million cubic meters of helium.
Gascade, the Gazprom-Wintershall joint venture, is undertaking a project to construct a hydrogen pipeline that would connect a green hydrogen production site (powered by wind electricity) in the North Sea to the German shore, it was reported on April 27. Called AquaDuctus, this is a joint project with RWE, Gasunie and Shell. The pipeline might be able to transport up to 1mnt/a of hydrogen after 2035. According to the press release, transporting hydrogen over distances greater than 400km via a pipeline has better economics than transporting the equivalent amount of electricity via high voltage lines over the same distance. The project will undergo a detailed feasibility study. Blue hydrogen might provide great potential for Russian O&G. We think that blue hydrogen is likely to be needed by Europe, at least as a transitional energy prior to the move to consuming only green hydrogen. A recent European Parliament communication said that low-carbon blue hydrogen can play a transitional role in ramping up the hydrogen economy. As a result, blue hydrogen projects create value for oil and gas companies, including in Russia, as this is closer to their core business and might have a shorter monetisation horizon. Gazprom is better positioned thanks to the existing facilitates and infrastructure, as well as the competence and, importantly, a significant resource. As regards to Gazprom’s ESG, we note that Gazprom’s GHG reporting is already quite good compared with many Russian peers, but the company could do far better on communicating its climate goals and commitments, as well as the strategy to reach these goals.
Russian gas giant Gazprom plans to raise the reserves by 497.2bn cubic meters (bcm) of gas and 8.6mn tonnes of liquid hydrocarbons in 2021,
154 RUSSIA Country Report May 2021 www.intellinews.com