Gazprom and Uniper discuss gas supplies and Nord Stream 2

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Andreas Schierenbeck, Chairman of the Management Board of Uniper, took place today in St. Petersburg.

The parties reviewed a wide range of issues related to bilateral cooperation, including gas supplies and the Nord Stream 2 project.

Background

Uniper SE is an energy company focused on natural gas, power generation, and global energy trading.

Gazprom and Uniper cooperate in gas supplies and transportation and implement joint scientific & technical and social & cultural programs.

Nord Stream 2 is the construction project for a gas pipeline with the annual capacity of 55 billion cubic meters from Russia to Germany across the Baltic Sea. In 2017, Nord Stream 2 AG signed agreements with ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall to provide financing for 50 per cent of the total cost of the project.

 



Alexey Miller and Germany’s Government Commissioner discuss gas cooperation between Gazprom and Ukraine from 2020 onward

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Georg Graf Waldersee, Commissioner of the Federal Government of the Federal Republic of Germany for Gas Transit across Ukraine, took place today in St. Petersburg.

The meeting participants discussed issues related to the interaction between Gazprom and Ukraine in the gas sector from 2020 onward.

Alexey Miller pointed out that a number of strategic issues need to be resolved prior to the signing of a new transit contract. The first issue concerns the settling of court disputes between the Company and its Ukrainian counterpart. This would mean a mutual waiver of claims and termination of the court proceedings between Gazprom and Naftogaz of Ukraine regarding the contracts for Russian gas supplies and transit, as well as restoration of balance between the commercial interests of the parties. In addition, the decision made by the Antimonopoly Committee of Ukraine to fine Gazprom for allegedly abusing its monopolistic position in Ukraine’s gas transit market would be reversed and the Company’s violated property rights in the country would be restored.

The second crucial issue is Ukraine’s readiness for direct purchases of Russian gas starting from 2020 and the expected amounts thereof. The decision on the part of Ukraine will directly affect the throughput of the Russian gas transmission system that Gazprom will have to maintain on the Ukrainian border.

It should also be noted that, in order to integrate the EU’s Third Energy Package into the national legislation, the Ukrainian authorities need to, inter alia, ensure the genuine independence of the national energy regulator and create an independent certified gas transmission operator. If these efforts are not completed by January 1, 2020, Gazprom will be willing to extend the effective transit contract for the transitional period taking into account the current market conditions.

 



Gazprom and BASF promote technology cooperation

  • Leading-edge technologies are serving to improve operational efficiency of Gazprom.

Sochi hosted an expanded 5th conference on promoting the relationship in the area of gas processing held by the Coordinating Committee for Strategic Cooperation between Gazprom and BASF.

The conference included a discussion of possible cooperation in technological innovation, digitalization of business processes, and localization of BASF chemical production in Russia.

To that end, Gazprom and BASF agreed to devise a comprehensive solution for separation of sulfur from natural gas. It is planned to optimize the performance and to improve the eco-efficiency of the Astrakhan Gas Processing Plant (GPP) by deploying state-of-the-art technologies. Special consideration will also be given to a possible application of highly-selective and energy-efficient technologies of BASF to boost the productivity and operational efficiency of amine gas treatment units at the Orenburg GPP.

The use of BASF synthetic compressor oils at Gazprom's facilities is another promising area of cooperation. Featuring a low deposit buildup and an extended lifetime, they can additionally contribute to improving the reliability of equipment and cost reduction.

Background

BASF SE is a leader in the global chemical industry. The company's portfolio includes six business segments: chemicals, synthetics, industrial solutions, surfactants and related technologies, nutrition and care, and agricultural solutions.

In 1999, Gazprom and BASF entered into the Agreement of Strategic Cooperation. A Joint Coordinating Committee including a Joint Working Group for interaction in gas chemical projects was set up by the companies. The conference on cooperation in the area of gas processing is held once every two years, starting in 2009.

 



Russian gas imports further growing in Hungary

  • Demand is already 22 per cent more than 2018 total supplies.
  • Activities to develop Hungary's gas transmission system are underway.

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary, took place today in Budapest, Hungary.

The parties discussed the current status and the prospects of their cooperation in the energy sector. A special focus was put on Hungary’s increasing demand for Russian gas. In 2019, Gazprom exported an estimated 9.3 billion cubic meters of gas to Hungary from the year’s beginning through October 29, and that is already a 22 per cent increase compared with the total gas supplies to Hungary recorded in 2018.

It was pointed out at the meeting that activities aimed at the gas transmission system development are being implemented in Hungary as provided for by the roadmap earlier signed by the parties.

Alexey Miller, as part of the Russian delegation, also took part in the meeting between Vladimir Putin, President of the Russian Federation, and Viktor Orban, Prime Minister of Hungary.

Background

In 2018, Gazprom supplied to Hungary 7.6 billion cubic meters of gas, an increase of 9.3 per cent (7 billion cubic meters) from 2017.

In 2017, Alexey Miller and Peter Szijjarto signed a roadmap to implement a number of measures aimed at developing Hungary's gas transmission system.

 



Power of Siberia pipeline filled up with gas

Gazprom has completed feeding natural gas into the Power of Siberia gas pipeline. The gas from the Chayandinskoye field in Yakutia has reached the near-border gas metering station in the proximity of Blagoveshchensk.

Power of Siberia's linear part is thus ready for the commencement of Russian pipeline gas supplies to China.

The next step is to feed gas into the transborder crossing under the Amur River.

Background

Power of Siberia is the largest gas transmission system in Russia's East. The trunkline will transport gas from the Irkutsk and Yakutia gas production centers to consumers in Russia's Far East and China.

Start-up and commissioning operations are now undergoing at the core facilities of the Chayandinskoye field, and drilling of gas production wells is progressing ahead of schedule. Production drilling is in full swing at the Irkutsk Region-based Kovyktinskoye field, which will start feeding gas into Power of Siberia in early 2023.

On May 21, 2014, Gazprom and CNPC signed the 30-year Sales and Purchase Agreement for Russian gas to be supplied via the eastern route (Power of Siberia gas pipeline). The document provides for gas deliveries to China in the amount of 38 billion cubic meters per year.

 



Gazprom Board of Directors reviews progress of Gas Infrastructure Expansion Program in Russian Regions

The Gazprom Board of Directors took note of the information about the ongoing implementation of programs aimed at expanding gas infrastructure in Russian constituent entities, including the data on the economic model, synchronization with regional programs for converting housing and utilities to gas, and extension of gas grid coverage in the Krasnoyarsk Territory.

It was stressed that consistent expansion of gas infrastructure in Russian regions is one of Gazprom's priorities in the domestic market. Thanks to the large-scale efforts undertaken by the Company, the average gas penetration rate in Russia is steadily growing: it reached 68.6 per cent as of January 1, 2019 (an increase of 15.3 per cent compared to 2005).

In 2019, the Gas Infrastructure Expansion Program covers 66 constituent entities of the Russian Federation. About 500 facilities (gas pipelines and gas distribution stations) are currently under construction, with another 500 being designed. It is planned to complete the construction of some 1,700 kilometers of gas pipelines this year. In addition, adjustments are being made to general schemes for gas supply and gas infrastructure expansion in nine Russian regions: the Republics of Dagestan and Bashkortostan, the Chechen Republic, and the Ivanovo, Kurgan, Omsk, Smolensk, Tomsk and Yaroslavl Regions. Such documents, which are updated on a regular basis, outline the principal lines of development for gas supply activities in Russian regions.

Works aimed at expanding the gas infrastructure are carried out by Gazprom in close conjunction with regional authorities. Five-year programs for gas supply and gas infrastructure expansion in every constituent entity are drawn up based on suggestions from regional administrations. At present, the programs for 2016–2020 are underway.

The Company brings gas to the borders of towns and villages, and the regional authorities create distribution networks and prepare consumers to receive gas. In order to synchronize these efforts, the parties sign relevant plans every year. However, as few as six Russian constituent entities have fulfilled all of their obligations since 2005, and the other regions are lagging behind.

Issues related to extending gas grid coverage in the Krasnoyarsk Territory were also considered at the meeting.

The Management Committee was tasked to continue implementing the gas infrastructure expansion programs in Russian constituent entities and to ensure that the programs for gas supply and gas infrastructure expansion in Russian regions for 2021–2025 are drawn up on the basis of outlooks for gas consumption and plans for preparing consumers to receive gas as confirmed by regional administrations.



Gazprom Board of Directors approves revised investment program and budget for 2019

The Gazprom Board of Directors approved the revised investment program and budget (financial plan) for 2019.

The key figures of the investment program did not change compared to the version approved by the Gazprom Management Committee in September this year.

Pursuant to the revised investment program for 2019, the overall amount of investments will stand at RUB 1,322.582 billion, which is RUB 3.142 billion less than was envisaged in the investment program approved in December 2018.

Of that amount, RUB 962.234 billion (down by RUB 0.786 billion) is intended for capital construction, RUB 180.493 billion (up by RUB 28.988 billion) for the acquisition of non-current assets by Gazprom, and RUB 179.856 billion (down by RUB 31.345 billion) for long-term financial investments.

The adjustments to the investment program for 2019 are related to the optimization of the investment project portfolio.

The newly revised and approved budget for 2019 will provide for a full coverage of the Company's liabilities without a deficit.



Gazprom and Fortum review cooperation-related issues

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Pekka Lundmark, President and CEO of Fortum, took place today in Moscow.

The parties discussed the state and prospects of cooperation between the two companies, paying particular attention to the Nord Stream 2 project.

Background

Fortum is a Finnish energy corporation.

Fortum holds a 49.99 per cent stake in Uniper SE. On October 8, 2019, Fortum announced that it had entered into agreements with the Elliott and Knight Vinke investment funds to acquire a 20.5 per cent stake in Uniper for approximately EUR 2.3 billion. As a result of the deal, Fortum's share in Uniper may increase to 70.5 per cent.

Nord Stream 2 is the construction project for a gas pipeline with the annual capacity of 55 billion cubic meters from Russia to Germany across the Baltic Sea. In 2017, Nord Stream 2 AG signed agreements with ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall to provide financing for 50 per cent of the total cost of the project.

Fortum owns 29.5 per cent of TGC-1 (part of the Gazprom Energoholding Group).

 



Footballers from Gazprom Transgaz Stavropol win world football championship as part of Russian team

On October 20, the world 6v6 football championship for amateur teams came to a close in Greece. The victory in the world tournament was won by the Russian team featuring employees of Gazprom Transgaz Stavropol.

The prestigious amateur tournament involved 40 national teams that had come to the Greek island of Crete from all over the world. The team from Russia included three employees of Gazprom Transgaz Stavropol: Alexander Kuksov, Zaurbek Ikoev, and Rustam Ramazanov.

The title of the best player in the competition went to Rustam Ramazanov, who scored as many as two goals in the final match with the Polish team. He is employed with the Svetlogradskoye Gas Pipeline Operation Center of Gazprom Transgaz Stavropol.

“The football players from our company had a truly triumphant showing in Greece, as the gas workers made a substantial contribution to the victory of the national team,” said Alexey Zavgorodnev, Director General of Gazprom Transgaz Stavropol. “Now, the victorious achievements of our athletes will be a cause for pride not just in their hometown but across the entire country.”

Background

Gazprom Transgaz Stavropol is a wholly-owned subsidiary of Gazprom.

The company operates linear gas trunklines that pass through 10 constituent entities of the North Caucasus and Southern Federal Districts of the Russian Federation. It also ensures that gas is supplied to Georgia, Armenia, Turkey, and the Republic of South Ossetia.

Gazprom Transgaz Stavropol consists of 18 branches, including 10 gas pipeline operation centers.

The company's annual gas transmission volumes vary from 60 to 70 billion cubic meters, while the total length of gas pipelines exceeds 8,000 kilometers. The company operates 12 compressor stations, 19 workshops, 11 types of gas compressors with a total installed capacity of 1,035.9 MW, and over 360 gas distribution stations.

Gazprom Transgaz Stavropol has in place an Integrated System of Occupational Health, Industrial and Fire Safety Management conforming to the international OHSAS 18000:2007 Occupational Health and Safety Management System standard.

The gas transmission company's environmental management system complies with the requirements of the ISO 14001:2015 international standard.

Gazprom Transgaz Stavropol employs over 7,500 people. It is headquartered in Stavropol.

 



Six more companies of Gazprom Group to join tax monitoring regime

On January 1, 2020, six companies of the Gazprom Group – Gazprom Dobycha Astrakhan, Gazprom Transgaz Samara, Gazprom Transgaz Saratov, Gazprom Transgaz Tchaikovsky, Gazprom Transgaz Ufa, and Gazprom Transgaz Volgograd – will join the tax monitoring regime.

Gazprom is actively working to integrate the Group's companies into the tax monitoring system.

The transition to this form of tax control aims first and foremost to further increase the transparency of the Gazprom Group's activities.

The step-by-step adoption of this mechanism by other companies within the Group will continue in the future.

Background

The first subsidiary of Gazprom to join the tax monitoring regime was Gazprom Export. The subsidiary transitioned to tax monitoring on January 1, 2019.

Tax monitoring is a form of tax control that allows a tax authority to monitor, in real time, the accuracy of tax calculations and the completeness and timeliness of payments (transfers) with regard to taxes, duties and insurance fees payable by taxpayers in compliance with the Tax Code of the Russian Federation.

Tax monitoring is a method of enhanced outreach whereby an organization gives a tax authority real-time access to accounting and tax data, gaining in return the right to, in case of doubt, request that the tax authority present a reasoned opinion on the tax consequences of the transactions being undertaken.

The introduction of a tax monitoring regime helps accelerate the resolution of tax legislation-related disputes, allows the taxpayer to avoid further accruals of taxes, penalties and fines, and alleviates the burden of tax control.