Page 113 - RusRPTMar19

9.2 Major corporate news 9.2.1 Oil & gas corporate news
● Gazprom
Russia’s Gazprom guides for at least 200bcm of gas exports to Europe in the short term The management of Russia’s state-owned gas giant Gazprom said that the company will continue to deliver a record circa200bn cubic meters (bcm) of gas to Europe in the near term, the head of Gazprom Export Elena Burmistrova told Kommersant on January 30. Russia’s share of gas supplied to Europe was in over 80% in the 1990s, but fell to a low of 34% in recent years as other sources came from Norway and LNG became available. However, with European demand for gas rising again the Russian share rose again and was 47% in 2018, according to Gazprom’s estimates. With demand continuing to rise and the new Nord Stream 2 pipeline due to come online at the end of this year, Russia’s share is likely to remain the same or rise next year. In the longer term, the company anticipates exports growing on the back of declining natural gas production in Europe and stable gas demand. These two trends might increase the total imports of natural gas to Europe by 81bcm by 2030, according to Burmistrova. “Gazprom’s strong operating data for 2018 (the company increased supplies to Europe 3.8% y/y to 201.7bcm) was mainly driven by the cold weather in Europe, as well as external problems at other gas suppliers, such as issues at the Groningen field. The company’s guidance is in line with our short-term forecast for the company’s supplies to Europe to remain flat at 200bcm/a in 2019F,” VTB Capital (VTBC) said in a note.
Gazprom's investment programme remains a problem as it reached a record RUB1.5 trillion in 2018. Even after the completion of the current major construction projects the company still plans to invest not less than RUB1 trillion a year, according to Deputy Chairman of the Board of Gazprom Andrei Kruglov. The upcoming programme includes RUB1.326 trillion in 2019, before falling to RUB1.065 trillion and 1.251 trillion, respectively in 2020 and 2021. The Russian Railways' investment program for 2018 was RUB550bn, utilities holding Rossetii invested RUB240bn, and Transneft is spent RUB342bn.
Russia’s pipeline operating company Nord Stream 2 AG is hoping to attract project financing worth €6bn, Chief Financial Officer Paul Corcoran told reporters on January 29. "We are still is discussions with export credit agencies. We are looking at somewhere around $6bn euro," he said as cited by Tass. The Nord Stream 2 pipeline is expected to come into service at the end of 2019. The pipeline runs from Russian gas field to Germany under the Baltic Sea. It will go through the exclusive economic zones and territorial waters of five countries - Russia, Finland, Sweden, Denmark, and Germany, thus bypassing transit countries of Ukraine, Belarus, Poland and other Eastern European and Baltic states. Each of the pipeline’s two stretches will have a capacity of 27.5bn cubic meters. The total cost of the project has been estimated at €9.5bn. Russia’s state-owned gas producer Gazprom is the only shareholder in the operating company. Gazprom's European partners in the project are Germany’s Wintershall and Uniper, Austria’s OMV, France’s Engie and Royal Dutch Shell.
The Deputy Chairmen of Gazprom’s Management Committee, Alexander Medvedev and Valery Golubev, who were overseeing the export and domestic gas markets, respectively, are to leave the company, Vedomosti
113 RUSSIA Country Report March 2019 www.intellinews.com