Russian gas exports to Italy growing steadily

The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Claudio Descalzi, Chief Executive Officer of Eni.

At meeting

The parties addressed Russian gas exports to Italy. Preliminary estimates indicate that in 2015 the gas exports totaled about 24.4 billion cubic meters showing a 12.6 per cent increase versus 2014. Between January 1 and 20, 2016 the gas exports grew by 24.5 per cent versus the same period of 2015. A key export market for Gazprom, Italy was Europe’s third-largest Russian gas consumer in 2015.

Alexey Miller

The parties also discussed the European gas market trends in light of the current oil prices. The companies confirmed their intention to continue closely cooperating in the Italian gas market and expressed their readiness to increase Russian gas sales under the existing long-term contracts.

Claudio Descalzi

Background

Eni is a global energy company operating in the oil and gas industries, engaged in power generation & sales and the petrochemical sector, and providing maintenance and engineering services at oil fields. Eni is Gazprom’s main partner within the Blue Stream gas pipeline project.

Source:: Russian gas exports to Italy growing steadily

Russian gas deliveries to Serbia grow by 23.6 per cent in 2015

The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Slavenko Terziс, Ambassador Extraordinary and Plenipotentiary of the Republic of Serbia to the Russian Federation.

At working meeting

The parties discussed Russian gas deliveries to Serbia. According to preliminary figures for 2015, the gas deliveries grew by 23.6 per cent to 1.7 billion cubic meters.

Special attention was given to the efficient functioning of the Banatski Dvor underground gas storage (UGS) facility and its role in securing a reliable supply of Russian gas to consumers in Serbia, Hungary, and Bosnia and Herzegovina. It was highlighted that the UGS facility with a working gas capacity of 450 million cubic meters was 100 per cent full by the 2015–2016 autumn/winter period.

The parties also addressed the prospects of expanding the UGS facility pursuant to the Memorandum of Understanding between Gazprom and Srbijagas signed in 2015.

Slavenko Terziс

Background

The Banatski Dvor UGS facility (Gazprom – 51 per cent, Srbijagas – 49 per cent) is among the largest gas storage facilities in Southeastern Europe. Its maximum gas deliverability makes up 5 million cubic meters per day.

On October 28, 2015 Gazprom and Srbijagas signed a Memorandum of Understanding, which reflects the parties’ intent to consider the ways for promoting the cooperation in underground gas storage, NGV sector and small-scale LNG shipments, inter alia, within sci-tech projects.

In 2013 a long-term contract was inked for Russian gas supply to Serbia for a period of 10 years.

Source:: Russian gas deliveries to Serbia grow by 23.6 per cent in 2015

Gazprom and Pakistan consider possibility of Russian LNG supplies

The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Shahid Khaqan Abbasi, Minister of Petroleum and Natural Resources of the Islamic Republic of Pakistan.

Shahid Khaqan Abbasi and Alexey Miller

The parties considered promising areas of cooperation, particularly addressing the possibility of Russian LNG supplies to Pakistan and Gazprom’s participation in hydrocarbon exploration and production projects in the Republic.

Alexey Miller (center)

Shahid Khaqan Abbasi (center)

Background

Being the sixth-largest in Asia-Pacific (after Australia, China, Indonesia, India and Malaysia), Pakistan’s recoverable natural gas reserves amount to 570 billion cubic meters.

In 2014 Pakistan produced 42 billion cubic meters of natural gas. The total volume of gas produced in the country is consumed domestically.

The main natural gas producers in Pakistan are the state-run companies Oil and Gas Development Corporation (OGDCL) and Pakistan Petroleum Ltd. (PPL).

The first LNG terminal in Pakistan with an annual capacity of 3 million tons was put into operation in March 2015.

Source:: Gazprom and Pakistan consider possibility of Russian LNG supplies

Gazprom and EDF discuss prospects for cooperation

Paris hosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Jean-Bernard Levy, Chairman and CEO of EDF.

The parties discussed the current status of and the prospects for cooperation in the gas industry. In particular, the parties addressed supplies of Russian gas to Europe.

Paris, France

Background

EDF is a leader in the European energy market. The company deals with electric power generation, transmission and distribution as well as is involved in the gas sector.

Source:: Gazprom and EDF discuss prospects for cooperation

Gazprom and Shell address strategic projects

St. Petersburg hosted a working meeting of Alexey Miller, Chairman of the Gazprom Management Committee with Harry Brekelmans, Maarten Wetselaar and Ronan Cassidy, Members of the Executive Committee of Shell.

The parties addressed a variety of issues relating to the strategic cooperation between Gazprom and Shell. Touching upon the Sakhalin II project, the parties highly appreciated the progress with its implementation. It was noted that in 2015 liquefied natural gas production within the project had totaled 10.8 million tons, exceeding the design capacity of the LNG plant by 1.2 million tons.

LNG plant in Sakhalin

The meeting also discussed the LNG plant expansion related activities. At present, the FEED of its third train is ongoing. It was highlighted that the experience gained during the implementation of the Sakhalin II project, one of the most successful LNG projects worldwide, would be fully taken into account in future joint projects of Gazprom and Shell.

Particular attention was given to the Nord Stream 2 project. The parties noted that in light of the declining European gas production, the construction of this gas pipeline was crucial for meeting the growing Russian gas demand in Europe in the future.

The parties also discussed issues concerning a swap of assets.

Background

Shell is a British-Dutch oil and gas company focused on hydrocarbon production, processing and marketing in over 70 countries worldwide.

In 2009 a liquefied natural gas plant with an annual capacity of 9.6 million tons was brought into operation as part of the Sakhalin II project. It is the only LNG plant in Russia. The Sakhalin II operator is Sakhalin Energy Investment Company Ltd. (Gazprom – 50 per cent plus one share, Shell – 27.5 per cent minus one share, Mitsui – 12.5 per cent and Mitsubishi – 10 per cent).

On June 18, 2015 Gazprom and Shell signed a Memorandum to construct the third production train of the LNG plant within Sakhalin II.

On June 18, 2015 Gazprom and Shell signed an Agreement of Strategic Cooperation promoting the partnership between the two companies across all the segments of the gas industry, from upstream to downstream, including in the form of a potential swap of assets.

On September 4, 2015 Gazprom, BASF, E.ON, ENGIE, OMV and Shell signed a Shareholders Agreement to build the Nord Stream 2 gas pipeline system with an annual capacity of 55 billion cubic meters from Russia to Germany across the Baltic Sea.

Source:: Gazprom and Shell address strategic projects

Sergey Suslikov takes over leadership at Gazprom Transgaz Tchaikovsky

Sergey Suslikov is appointed as Director General of Gazprom Transgaz Tchaikovsky.

Sergey Suslikov

Sergey Suslikov was born in 1962 in the North Ossetian ASSR. In 1988 he graduated from the Krasnodar Polytechnic Institute of the Order of the Red Banner of Labor, majoring in Cooling and Compressor Machines and Units.

Sergey Suslikov has been employed at Gazprom Group for 28 years.

Between 1988 and 1993 he went up the career ladder from 4th grade repairman to Deputy Head – Chief Engineer at the Akchalokskoye Line Pipe Operation Center with the Sredaztransgaz Production Association.

Between 1993 and 1998 – 1st category engineer (procurement and supply) at the Berezanskoye Line Pipe Operation Center, 2nd category engineer, Chief Engineer, Head of the Kushchevskoye Line Pipe Operation Center, Kubangazprom.

Between 1998 and 2007 – Deputy Director General for Gas Transmission, Kubangazprom.

Between 2007 and 2016 – Deputy Director General for Gas Transmission, Deputy Director General for Production, Chief Engineer – First Deputy Director General, Gazprom Transgaz Krasnodar.

Viktor Chichelov, former head of Gazprom Transgaz Tchaikovsky, is relieved of his post due to retirement.

Background

Gazprom Transgaz Tchaikovsky is a wholly-owned subsidiary of Gazprom. The company is focused on natural gas transmission to central regions of the Russian Federation, the Republic of Tatarstan, the Republic of Udmurtia, the Perm Territory and the Kirov Region.

Source:: Sergey Suslikov takes over leadership at Gazprom Transgaz Tchaikovsky

Gazprom’s financial information under International Financial Reporting Standards (IFRS) for the nine months ended September 30, 2015

Today PJSC Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (IAS 34) for the nine months ended September 30, 2015.

The table below presents the unaudited consolidated interim condensed statement of comprehensive income prepared in accordance with IFRS for the nine months ended September 30, 2015 and for the nine months ended September 30, 2014. All amounts are presented in millions of the Russian Rubles.

Nine months ended,
September 30

2015

2014

Sales

4,206,217

4,007,522

Net gain from trading activity

8,320

9,903

Operating expenses

(3,171,784)

(3,018,824)

Operating profit

1,042,753

998,601

Finance income

1,145,005

189,629

Finance expense

(1,421,168)

(501,883)

Share of net income of associated undertakings and joint ventures

93,181

71,493

Gains (losses) on disposal of available-for-sale financial assets

5,066

(981)

Profit before profit tax

864,837

756,859

Current profit tax expense

(130,177)

(141,027)

Deferred profit tax expense

(44,389)

(43,178)

Profit tax expense

(174,566)

(184,205)

Profit for the period

690,271

572,654

Other comprehensive income (loss):

Items that will not be reclassified to profit or loss:

Remeasurements of post-employment benefit obligations

(84,204)

(66,523)

Total items that will not be reclassified to profit or loss

(84,204)

(66,523)

Items that may be reclassified subsequently to profit or loss:

Gains (losses) arising from change in fair value

of available-for-sale financial assets, net of tax

47,294

(12,070)

Share of other comprehensive income (loss)

of associated undertakings and joint ventures

26,133

(5,209)

Translation differences

164,804

142,779

Losses from cash flow hedges, net of tax

(4,777)

(16,741)

Total items that may be reclassified subsequently to profit or loss

233,454

108,759

Other comprehensive income for the period, net of tax

149,250

42,236

Total comprehensive income for the period

839,521

614,890

Profit attributable to:

Owners of PJSC Gazprom

673,904

556,254

Non-controlling interest

16,367

16,400

690,271

572,654

Total comprehensive income attributable to:

Owners of PJSC Gazprom

815,437

595,918

Non-controlling interest

24,084

18,972

839,521

614,890

Total sales (net of excise tax, VAT and customs duties) increased by RUB 198,695 million, or 5%, to RUB 4,206,217 million for the nine months ended September 30, 2015 compared to the same period of the prior year. The increase in sales is mainly driven by the increase in sales of gas to Europe and Other countries.

More detailed information concerning the main items of the sales’ structure for the nine months ended September 30, 2015 and September 30, 2014 is presented in the table below.

(RUB million unless indicated otherwise)

Nine months ended

September 30,

2015

2014

Sales of gas

Europe and Other countries

Net sales (net of excise tax and customs duties)

1,430,472

1,227,090

Volumes in bcm

125.3

122.5

Average price, RUB per mcm (including excise tax and customs duties)

15,033.7

12,509.8

Former Soviet Union countries

Net sales (net of customs duties)

292,002

304,952

Volumes in bcm

27.2

36.7

Average price, RUB per mcm (including customs duties)

11,875.3

10,000.7

Russian Federation

Net sales (net of VAT)

538,572

552,362

Volumes in bcm

150.6

157.9

Average price, RUB per mcm (net of VAT)

3,576.7

3,498.6

Total sales of gas

Retroactive gas price adjustments

12,074

Net sales (net of VAT, excise tax and customs duties)

2,273,120

2,084,404

Volumes in bcm

303.1

317.1

Net sales of refined products (net of excise tax, VAT and customs duties)

1,175,078

1,226,510

Net electric and heat energy sales (net of VAT)

291,603

291,941

Net sales of crude oil and gas condensate (net of VAT and customs duties)

184,636

152,394

Net gas transportation sales (net of VAT)

139,068

125,279

Other revenues (net of VAT)

142,712

126,994

Total sales (net of excise tax, VAT and customs duties)

4,206,217

4,007,522

Net sales of gas increased by RUB 188,716 million, or 9%, to RUB 2,273,120 million, for the nine months ended September 30, 2015 compared to the same period of the prior year.

Net sales of gas to Europe and Other countries increased by RUB 203,382 million, or 17%, to RUB 1,430,472 million for the nine months ended September 30, 2015 compared to the same period of the prior year. The overall increase in sales of gas to Europe and Other countries was driven by the increase in average Russian Ruble price (including excise tax and customs duties) by 20% compared to the same period of the prior year. The change was mainly driven by the increase in the foreign exchange rates which was enhanced by the increase in volumes of gas sold by 2%, or 2.8 bcm.

Net sales of gas to Former Soviet Union countries decreased by RUB 12,950 million, or 4%, to RUB 292,002 million for the nine months ended September 30, 2015 compared to the same period of the prior year. The change was due to the decrease in volumes of gas sold by 26%, or 9.5 bcm, which is partially compensated by the increase in average Russian Ruble price (including customs duties) by 19%. The change was mainly driven by the increase in foreign exchange rates.

Net sales of gas in the Russian Federation decreased by RUB 13,790 million, or 2%, to RUB 538,572 million for the nine months ended September 30, 2015 compared to the same period of the prior year. This is primarily explained by the decrease in volumes of gas sold by 5%, or 7.3 bcm.

Operating expenses increased by RUB 152,960 million, or 5%, to RUB 3,171,784 million for the nine months ended September 30, 2015 compared to the same period of the prior year.

The increase in operating expenses is explained by an increase in a number of items such as: “Taxes other than on income” increased by RUB 40,759 million due to an increase in mineral extraction tax and property tax; “Transit of gas, oil and refined products” increased by RUB 97,287 million, or 34%, due to appreciation of US Dollar and Euro against the Russian Ruble.

Profit attributable to owners of PJSC Gazprom for the nine months ended September 30, 2015 totaled RUB 673,904 which is RUB 117,650 million, or 21%, higher compared to the same period of the prior year.

Net debt balance increased by RUB 372,086 million, or 23%, from RUB 1,650,633 million as of December 31, 2014 to RUB 2,022,719 million as of September 30, 2015. This increase resulted from change in foreign currency exchange rates (appreciation of US Dollar and Euro against the Russian Ruble), as well as increase in long-term and short-term borrowings.

More detailed information on the IFRS consolidated interim condensed financial information for the nine months ended September 30, 2015 can be found here.

IFRS results 2015

Source:: Gazprom’s financial information under International Financial Reporting Standards (IFRS) for the nine months ended September 30, 2015

Growth in demand for Russian gas in Europe confirms importance of Nord Stream 2 construction

The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Rainer Seele, Chairman of the OMV Executive Board.

At working meeting

The parties discussed issues of cooperation, particularly addressing the Nord Stream 2 project. It was noted that the growth in demand for Russian gas in Europe confirmed the importance of building this gas pipeline.

Background

OMV is a major partner of Gazprom in Austria.

On September 4, 2015 Gazprom, BASF, E.ON, ENGIE, OMV and Shell inked the Shareholders Agreement to construct the Nord Stream 2 gas pipeline system with the capacity of 55 billion cubic meters of gas a year from Russia to Germany across the Baltic Sea.

Also on September 4, 2015 Gazprom and OMV signed the Agreement on the main terms and conditions of an asset swap. If the deal is completed, OMV will acquire a 24.98 per cent stake in the project for developing Blocks 4A and 5A of the Achimov deposits at the Urengoy oil, gas and condensate field in exchange for Gazprom’s participation in OMV assets.

On October 23, 2015 Gazprom and OMV signed the Memorandum of Understanding on oil supply to OMV from the Gazprom Group portfolio.

Source:: Growth in demand for Russian gas in Europe confirms importance of Nord Stream 2 construction

Gazprom and Amber Grid sign long-term Agreement on gas transit to Kaliningrad Region

Gazprom and Amber Grid signed a new long-term Agreement on Russian gas transit via Lithuania to the Kaliningrad Region.

The Document signed for a ten-year term provides for gas transit via the Republic in the amount of up to 2.5 billion cubic meters of gas a year. The Agreement will become effective on January 1, 2016.

Background

Amber Grid is engaged in gas transportation across Lithuania.

Source:: Gazprom and Amber Grid sign long-term Agreement on gas transit to Kaliningrad Region

Gazprom’s Board of Directors approves Investment Program, Budget and Cost Reduction Program for 2016

The Gazprom Board of Directors took notice of the information about the Company’s preliminary operating results for 2015, projected Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2017–2018.

The Board of Directors approved Gazprom’s Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2016.

Pursuant to the Investment Program for 2016, the total amount of investments will make up RUB 842 billion. At the same time, the amount of capital investments will account for RUB 777.628 billion, of which RUB 767.327 billion and RUB 10.301 billion will be allocated for capital construction and acquisition of non-current assets accordingly. The amount of long-term financial investments will total RUB 64.372 billion.

Gazprom’s Board of Directors approves Investment Program, Budget and Cost Reduction Program for 2016

According to the approved Budget of Gazprom for 2016, the external financial borrowings will stand at RUB 90 billion. The approved financial plan will secure a full coverage of Gazprom’s liabilities.

The Cost Optimization (reduction) Program for 2016 provides for the measures aimed at cost optimization (reduction) with the expected cumulative effect of RUB 15.3 billion.

The Board of Directors approved the Long-Term Development Program of Gazprom.

The Board of Directors considered the information about the effect of the 2015 results on the long-term outlook for the global energy market development as well as the information about the progress with the Roadmap for introducing provisions of the Corporate Management Code.

Source:: Gazprom’s Board of Directors approves Investment Program, Budget and Cost Reduction Program for 2016

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