Page 143 - RusRPTJun21

Annual dividends are envisaged by the official dividend policy, and no decisions to amend it have been made. The company is committed to a predictable and transparent dividend policy.
· Gazprom Group’s capex for 2021 is guided at RUB1.5-1.6tn (broadly flat y/y). The company stated, though, that it would be amended after the 6mo21 financial results.
· The European export guidance was reiterated at 175-183bcm, with an average realised price of $200+/kcm expected.
· In 1Q21, the oil-linked component share reached 20%, on average.
· Transportation costs became more efficient thanks to the prolongation of gas deliveries via TurkStream to Serbia through Bulgaria. The pipeline utilisation ratio reached 73% in 1Q21 and is set to grow further this year thanks to deliveries reaching Hungary. At full capacity, the pipeline allows the company to save some $500mn on transportation expenses.
· With Nord Stream 2 at full capacity, transport cost-saving is $1bn, according to the company.
· The effective gas and condensate METs were RUB923/kcm and RUB7432/t, respectively
· Amur GPP will be launched in the coming months.
· Gazprom is working on different development scenarios for the
company, including one with the potential to reach carbon
neutrality by 2050.
· Lakhta 2 business centre is to be constructed by an SPV company
not affiliated with Gazprom, based on project financing.
The company did not reveal any particularly new information. Gazprom kept its conservative guidance on export volumes and prices, despite the tangible market improvement. So, we do not change our forecast of gas export volumes to Europe this year (194bcm), with the average realised price potentially reaching some $260/kcm.
The indicative interim DPS of RUB8.26 (a 3.1% DY) came in line with our estimate, based on the reported numbers. We estimate that Gazprom might pay DPS of almost RUB39 for 2021F, which implies a 15% DY.
Gazprom traditionally revises its capex (predominantly upward) every September, and we believe this year will be no exception (nor should it be a surprise for investors). We keep our more conservative stance for now, with capex modelled for Gazprom Group at RUB1.7tn ($23.5bn) for 2021F.
Gazprom's management upped its guidance of gas production this year to 506.5 bcm from the previous guidance of 496.9 bcm. It attributed this to higher than expected production in 1Q21. In particular, output at the Bovanenkovo field is now expected to exceed 100 bcm.
The capex budget for the Ust-Luga integrated project has not been approved yet, as the company stated that it is still finalizing the FEED for it. The GPP/LNG facility, where Gazprom will have a 50% stake, will have four GPP trains (45 bcmpa total capacity) and two LNG trains (13 mtpa in total) with Linde technology. The company has a wet gas resource base in the Nadym-Pur-Taz producing region (including
143 RUSSIA Country Report June 2021 www.intellinews.com