Mineral and Raw Material Base Development. Gas Production. Gas Transmission System Development Press Conference held

May 14, 2019, 02:30 pm (Moscow time)

Participants:

  • Vitaly Markelov, Deputy Chairman of the Management Committee, Gazprom;
  • Oleg Aksyutin, Deputy Chairman of the Management Committee, Head of Department, Gazprom;
  • Sergey Menshikov, Member of the Management Committee, Head of Department, Gazprom;
  • Vyacheslav Mikhalenko, Member of the Management Committee, Head of Department, Gazprom;
  • Vasily Petlichenko, Deputy Head of Department, Gazprom.

Watch Press Conference

Listen to audio

For Gazprom’s Press Conferences audio broadcast please dial:

+7 495 719-35-77 (Russian)

+7 495 719-30-00 (English)

Materials

Background

Presentation



Gazprom Management Committee proposes new dividend amount of RUB 16.61 per share for 2018

The Gazprom Management Committee held a meeting.

The Management Committee reviewed and endorsed the new proposals to the Board of Directors regarding the distribution of Gazprom's profit and the dividend payout based on the Company's operating results for 2018.

The Management Committee proposed that the dividends make up RUB 393.2 billion, or RUB 16.61 per share (more than double the amount for 2017).

The decisions on the profit distribution and dividend payout, dividend size, payout method and dates, as well as the date on which the list of persons entitled to receive dividends is drawn up, will be made by the annual General Shareholders Meeting of Gazprom as recommended by the Board of Directors.



Final round of 8th corporate Fakel Festival opens in Sochi

The opening ceremony for the final round of Gazprom's 8th corporate Fakel Festival took place in Krasnaya Polyana, Sochi. The event brought together over 1,600 people representing 40 delegations from Russia, Belarus, Kyrgyzstan, and China. The Festival's guests include delegations from Bolivia, France, Germany, Uzbekistan, and Vietnam.

Over the course of three days, contestants will present as many as 131 performances in such categories as Vocals, Vocal and Instrumental Ensembles, Choreography, Folk Music, and Circus and Performance Art. Individual performers and ensembles will compete in three age groups: 5 to 10, 11 to 16, and 17 and older. In addition, the Young Painter contest will be held at the Festival.

Alexey Miller, Chairman of the Gazprom Management Committee, sent a welcome message to the competition's participants and guests. The message says:

“Our Festival has been going strong for 15 years. Over that time, it has blossomed into a major cultural project with an international reach. The Festival presents a formidable creative challenge for everyone who goes on stage. It also gives audiences a wonderful opportunity to learn about the cultural traditions of many Russian regions and other countries. It is heartening to watch such vastly different yet uniformly talented artists.”

“In my many years of sitting on the Festival's jury, I have come to the conclusion that professional performers can learn a lot from the amateur artists and ensembles of Gazprom. Their success stems from exceptional artistry and creative freedom,” said Alexandra Permyakova, chair of the Festival's jury and head of the Pyatnitsky State Russian Folk Choir.

The winners of the final round of Gazprom's 8th corporate Fakel Festival will be announced at the awards ceremony on May 15. The Festival will conclude with a Gala Concert featuring the laureates on May 16.

Background

The biennial Fakel Festival has a tripartite structure. During the first round, Gazprom's subsidiaries select their best performers, who then take part in the zonal rounds. The zonal rounds (for the southern and northern zones) are held at the second stage. The winners then perform in the third and final round.

The first corporate Fakel Festival was conducted in 2004–2005. The host cities of the zonal rounds included Astrakhan, Belgorod, Kazan, Khanty-Mansiysk, Nizhny Novgorod, Orenburg (twice), Surgut, Tomsk, Yekaterinburg, and Yugorsk. The final rounds of the Festival were held in Gelendzhik (2006–2012), Vitebsk (Belarus, 2013), and Sochi (2015 and 2017).

In 2019, the final round of the Fakel Festival was organized by Gazprom Transgaz Krasnodar.

Full coverage of the Festival is available at its official website www.gazpromfakel.ru (in Russian).

 



Notice of Press Conferences to be held in lead-up to Shareholders Meeting

Dear members of the media and representatives of investment and finance companies,

We are pleased to invite you to the traditional Press Conferences of Gazprom's top management to be held in the lead-up to the Company's annual General Shareholders Meeting.

The Press Conferences will take place from May 14 through June 20 at the TASS Press Center in St. Petersburg at the following address: 37A Shpalernaya St.

You can also take part in the Press Conferences via video calls from the TASS Press Center in Moscow at the following address: 2 Tverskoy Blvd.

Admittance to the TASS buildings in St. Petersburg and Moscow will be granted in accordance with accreditation lists. All visitors must carry passports and press passes.

May 14 (02:30 pm, Moscow time)

Mineral and Raw Material Base Development. Gas Production. Gas Transmission System Development

Participants:

  • Vitaly Markelov, Deputy Chairman of the Management Committee, Gazprom;
  • Oleg Aksyutin, Deputy Chairman of the Management Committee, Head of Department, Gazprom;
  • Sergey Menshikov, Member of the Management Committee, Head of Department, Gazprom;
  • Vyacheslav Mikhalenko, Member of the Management Committee, Head of Department, Gazprom;
  • Vasily Petlichenko, Deputy Head of Department, Gazprom.

May 20 (02:30 pm, Moscow time)

Gazprom's Power Generation Strategy

Participant:

  • Denis Fyodorov, Head of Directorate, Gazprom; Director General, Gazprom Energoholding.

May 22 (02:30 pm, Moscow time)

Gas Supply to Domestic Market. Executing Russian Regions Gasification Program

Participants:

  • Gennady Sukhov, Member of the Management Committee, Head of Department, Gazprom;
  • Sergey Gustov, Director General, Gazprom Mezhregiongaz.

May 28 (02:30 pm, Moscow time)

Gazprom in Eastern Russia, Entry into Asia-Pacific Markets

Participants:

June 18 (02:30 pm, Moscow time)

Gas Export and Enhancing Reliability of Gas Supply to Europe

Participants:

  • Elena Burmistrova, Deputy Chairman of the Management Committee, Gazprom; Director General, Gazprom Export;
  • Sergey Kuznets, Member of the Management Committee, Head of Department, Gazprom;
  • Pavel Oderov, Head of Department, Gazprom.

June 20 (02:30 pm, Moscow time)

Gazprom's Financial and Economic Policy

Participants:

 

To obtain accreditation for journalists, investment companies' representatives, and investment bank analysts, please call:

+7 812 609-34-21 

The Press Conferences will be broadcast online in Russian and English at www.gazpromvideo.ru.

Live audio transmissions will be available in Russian and English at the phone numbers +7 495 719-35-77 and +7 495 719-30-00, respectively (multi-line system).

In addition, visitors of the www.gazpromvideo.ru website will have the opportunity to pose written questions online to the participants of the Press Conferences.



Children of Gazprom Transgaz Nizhny Novgorod employees awarded at national arts festival

On April 21, the 19th Plasticine Crow National Children's Arts Festival concluded in Saransk with a big gala concert. The team of the Torbeyevskoye Gas Pipeline Operation Center, branch of Gazprom Transgaz Nizhny Novgorod, had taken part in the festival.

The final round of the competition included 54 concert numbers by young performers aged between 5 and 15, representing the Republic of Mordovia and such Russian regions as the Moscow, Ryazan, Nizhny Novgorod, Penza and Ulyanovsk regions and the Republic of Chuvashia. The children's talents were assessed by a jury led by Pyotr Sorokin, Merited Artist of Russia, in four categories: Song, Dance, Spoken Word, and Drawing.

Intro, a Vyacheslav Shvetsov-led band representing the club Allegro under the Torbeyevskoye Gas Pipeline Operation Center, took third place in the Song category after performing a composition by Europe. Intro features Alexander Yuganov on vocals, Ksenia Artyukova on drums, Ivan Parfilov and Stepan Shichkin on guitar, and Karina Zmeeva and Tatyana Baysheva on keyboards.

Background

Gazprom Transgaz Nizhny Novgorod is a wholly-owned subsidiary of Gazprom that delivers natural gas to 15 regions in the Volga and Central Federal Districts of the Russian Federation.

The company's gas transmission system is composed of trunklines stretching for over 13,000 kilometers.

Gazprom Transgaz Nizhny Novgorod operates 54 compressor workshops, 284 gas compressor units, 375 gas distribution stations, and 15 CNG filling stations. The company's efficiency is achieved through 25 branches, including 16 gas pipeline operation centers, the Engineering Center, the Emergency Response and Recovery Directorate, the Procurement Directorate, the Utility Vehicles and Special-Purpose Machinery Directorate, the Volgoavtogaz company, and the Staff Training Center.

The ISO 14001:2004 environmental management system is in effect at Gazprom Transgaz Nizhny Novgorod. The company employs around 11,000 people. It is headquartered in Nizhny Novgorod.

 



Employees of Gazprom Transgaz Tchaikovsky take part in Green Spring environmental cleanup

On April 24 and 26, employees of the head office and branches of Gazprom Transgaz Tchaikovsky carried out a number of cleanup actions in Tchaikovsky as part of the Green Spring countrywide environmental cleanup.

The cleanup was kicked off by the employees of the company's culture and sports center. They cleaned Tchaikovsky Square, Sportivnaya Street, and the areas adjacent to the Zolotoy Shar and Olimp corporate sports facilities.

On April 26, employees of the corporate security service removed debris and dead wood from the area near Kindergarten No. 27. They were assisted by the representatives of the Tchaikovsky security unit under the Volga Interregional Security Directorate of Gazprom.

On the same day, employees from the administration of Gazprom Transgaz Tchaikovsky cleaned Primorsky Boulevard, home to the company's head office. Just across the street, their fellow gas workers tidied up the Walkway of Pioneer Builders and Creators of Tchaikovsky. They removed litter, washed the pavement, and painted benches and trash bins.

A total of 442 employees of Gazprom Transgaz Tchaikovsky were involved in the cleaning and improvement of municipal areas during the last ten days of April. The event was part of the 6th Green Spring countrywide environmental cleanup organized by the Vernadsky Ecological Foundation in cooperation with the All-Russian Society for Nature Protection. The volunteers collected 23 tons of trash in an area covering over 40 hectares.

 



Gazprom’s financial statements under International Financial Reporting Standards (IFRS) for the year ended December 31, 2018

Today PJSC Gazprom issued its audited consolidated financial statements prepared in accordance with International Financial Reporting Standards for the year ended December 31, 2018.

The table below presents the consolidated statement of comprehensive income prepared in accordance with IFRS for the years ended December 31, 2018 and December 31, 2017. All amounts are presented in millions of the Russian Rubles.

 

 

Year ended December 31,

2018

2017

 

 

 

Sales

8,224,177

6,546,143

Net gain (loss) from trading activity

18,015

(16,352)

Operating expenses

(6,181,191)

(5,697,056)

(Impairment loss) reversal of impairment loss on financial assets

(130,971)

38,670

Operating profit

1,930,030

871,405

 

 

 

Finance income

503,091

426,705

Finance expense

(813,042)

(407,044)

Share of profit of associates and joint ventures

232,483

126,940

Profit before profit tax

1,852,562

1,018,006

 

 

 

Current profit tax expense

(278,233)

(241,817)

Deferred profit tax expense

(45,333)

(9,310)

Profit tax

(323,566)

(251,127)

 

 

 

Profit for the year

1,528,996

766,879

 

 

 

Other comprehensive income (loss):

 

 

Items that will not be reclassified to profit or loss:

 

 

Gain (loss) arising from changes in fair value of financial assets measured at fair value through other comprehensive income,
 net of tax

148,963

(30,404)

Remeasurement of provision for post-employment benefits

19,854

(5,064)

Total other comprehensive income (loss) that will not be reclassified to profit or loss

168,817

(35,468)

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

Share of other comprehensive income of associates and
joint ventures

13,923

2,967

Translation differences

222,221

23,290

Gain from hedging operations, net of tax

10,082

13,601

Total other comprehensive income that may be reclassified

 subsequently to profit or loss

246,226

39,858

Total other comprehensive income for the year, net of tax

415,043

4,390

Comprehensive income for the year

1,944,039

771,269

 

 

 

Profit for the year attributable to:

 

 

 Owners of PJSC Gazprom

1,456,270

714,302

 Non-controlling interest

72,726

52,577

 

1,528,996

766,879

 

 

 

Comprehensive income for the year attributable to:

 

 

 Owners of PJSC Gazprom

1,858,486

710,840

 Non-controlling interest

85,553

60,429

 

1,944,039

771,269

Sales (net of excise tax, VAT and customs duties) increased by RUB 1,678,034 million, or 26%, to RUB 8,224,177 million for the year ended December 31, 2018 compared to the year ended December 31, 2017. The increase in sales was mainly due to an increase in sales of gas, refined products, crude oil and gas condensate.

More detailed information concerning the main items of the sales structure for the years ended December 31, 2018 and December 31, 2017 is presented below.

(RUB million unless indicated otherwise)

 

Year ended December 31,

2018

2017

Sales of gas

 

 

Europe and Other countries

 

 

Net sales (net of excise tax and customs duties)

2,951,215

2,221,217

Volumes in bcm

243.3

242.0

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

15,499.5

11,670.5

Former Soviet Union countries

 

 

Net sales (net of customs duties)

348,625

292,777

Volumes in bcm

38.1

35.0

Average price, RUB per mcm (including customs duties)

10,225.9

9,237.0

Russian Federation

 

 

Net sales (net of VAT)

954,493

875,685

Volumes in bcm

239.7

229.9

Average price, RUB per mcm (net of VAT)

3,981.3

3,808.3

Total sales of gas

 

 

Retroactive gas price adjustments

49,338

(49,092)

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

4,303,671

3,340,587

Volumes in bcm

521.1

506.9

 

 

 

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

2,179,772

1,687,090

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

734,953

539,958

Electric and heat energy net sales (net of VAT)

522,095

503,819

Gas transportation net sales (net of VAT)

225,673

235,061

Other sales (net of VAT)

258,013

239,628

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

8,224,177 

6,546,143

Net sales of gas increased by RUB 963,084 million, or 29%, to RUB 4,303,671 million for the year ended December 31, 2018 compared to the year ended December 31, 2017, that was mainly due to an increase in average prices in the segment Europe and other countries.

Net sales of gas to Europe and other countries increased by RUB 729,998 million, or 33%, to RUB 2,951,215 million for the year ended December 31, 2018 compared to the year ended December 31, 2017. The change was mainly due to the increase in average prices (including excise tax and customs duties) denominated in the Russian Ruble by 33%. At the same time average prices denominated in US Dollar increased by 23%.

Net sales of gas to Former Soviet Union countries increased by RUB 55,848 million, or 19%, to RUB 348,625 million for the year ended December 31, 2018 compared to the year ended December 31, 2017. The change was due to the increase in average prices (including customs duties) denominated in the Russian Ruble by 11% and the increase in volumes of gas sold by 9%, or 3.1 bcm. At the same time average prices denominated in US Dollar increased by 3%.

Net sales of gas in the Russian Federation increased by RUB 78,808 million, or 9%, to RUB 954,493 million for the year ended December 31, 2018 compared to the year ended December 31, 2017. This change was mainly explained by the increase in average prices by 5% and the increase in volumes of gas sold by 4%, or 9.8 bcm.

Net sales of refined products increased by RUB 492,682 million, or 29%, to RUB 2,179,772 million for the year ended December 31, 2018 compared to the year ended December 31, 2017. The increase in net sales of refined products was due to an increase in average prices in all geographic segments and an increase in Gazprom neft Group sales volumes to customers in the Russian Federation, Europe and other countries.

Net sales of crude oil and gas condensate increased by RUB 194,995 million, or 36%, to RUB 734,953 million for the year ended December 31, 2018 compared to the year ended December 31, 2017. The increase in net sales of crude oil and gas condensate was mainly due to an increase in average prices.

Operating expenses increased by RUB 484,135 million, or 8%, to RUB 6,181,191 million for the year ended December 31, 2018 compared to the year ended December 31, 2017.

The change in operating expenses is primarily caused by an increase in the item “Taxes other than on profit” by RUB 252,219 million, or 20%, for the year ended December 31, 2018 compared to the year ended December 31, 2017. The increase is due to an increase in mineral extraction tax (MET) by RUB 248,654 million, or 27%, mainly as a result of a rise in crude oil prices, an increase in the adjusting coefficient in the MET formula for crude oil and an increase in coefficient values in the MET formula for gas.

The item “Purchased gas and oil” increased by RUB 232,684 million, or 19%, for the year ended December 31, 2018 compared to the year ended December 31, 2017, that was mainly due to an increase in average gas and oil prices.

The balance of foreign exchange rate differences reflected within the item “Net finance income (expense)” produced the loss in the amount of RUB 332,225 million for the year ended December 31, 2018 compared to the loss of RUB 10,728 million for the year ended December 31, 2017. There were the appreciation of US Dollar and Euro against the Russian Ruble by 21 % and 15 %, respectively, for the reporting year compared to the depreciation of US Dollar against the Russian Ruble by 5% and the appreciation of Euro against the Russian Ruble by 8% for the prior year.

Profit attributable to the owners of PJSC Gazprom for the year ended December 31, 2018 amounted to RUB 1,456,270 million which is by RUB 741,968 million, or 104 %, more than for the year ended December 31, 2017.

Net debt balance (defined as the sum of short-term borrowings, current portion of long-term borrowings, short-term promissory notes payable, long-term borrowings, long-term promissory notes payable, net of cash and cash equivalents) increased by RUB 616,892 million, or 26%, from RUB 2,397,511 million as of December 31, 2017 to RUB 3,014,403 million as of December 31, 2018. This change was mainly due to an increase in the amount of long-term borrowings denominated in the Russian Ruble caused by the appreciation of US Dollar and Euro against the Russian Ruble.

More detailed information on the IFRS consolidated financial statements for the year ended December 31, 2018 can be found here.



Gazprom and CNPC discuss pipeline gas supplies to China

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Wang Yilin, Chairman of the Board of Directors of CNPC, took place today in Beijing, China.

The meeting participants reviewed the development prospects of the Chinese gas market and the strategic aspects of cooperation between Gazprom and CNPC, paying particular attention to gas supplies. It was noted that the preparation of facilities for Russian gas exports to China via the Power of Siberia gas pipeline from December 1, 2019, is going according to schedule. It is planned to start injecting natural gas into the pipeline in the third quarter of this year.

The parties discussed issues related to the planned deliveries of Russian gas to China from the Far East and via the western route.

In addition, the meeting touched upon the collaboration between the companies in the areas of gas-fired power generation, use of natural gas as a vehicle fuel, underground gas storage, and science and culture.

Background

Gazprom's main partner in China is CNPC, a state-owned oil and gas company.

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.

In 2015, Gazprom and CNPC inked the Heads of Agreement for pipeline deliveries of natural gas from Western Siberian fields to China via the western route (Power of Siberia 2 gas pipeline).

In 2016, Gazprom and CNPC signed the Memorandum of Understanding on underground gas storage and gas-fired power generation in China and the Memorandum to explore the opportunities for cooperation in the NGV sector.

In July 2017, Gazprom and CNPC inked the Supplementary Agreement to the Sales and Purchase Agreement for gas to be supplied via the eastern route signed in 2014.

In December 2017, Gazprom and CNPC signed the Heads of Agreement for natural gas to be supplied from Russia's Far East to China.

 



Gazprom to start building inter-settlement gas pipeline to Vostochny Cosmodrome in near future

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Vasily Orlov, Governor of the Amur Region, took place today in Moscow.

It was noted that the Amur Region is an area of strategic interest for Gazprom, as the Power of Siberia gas pipeline passes through its territory. The pipeline will start delivering gas supplies from Russia to China on December 1, 2019. The construction of the pipeline's linear part from the Chayandinskoye field in Yakutia to the border with China is mostly complete. The under-construction Atamanskaya compressor station near the border is currently at 74 per cent readiness. The Amur Gas Processing Plant (GPP) is being built, with the core heavy and large equipment of its first start-up complex already installed.

The meeting participants discussed the outlook for gas infrastructure expansion in the Amur Region. It was stressed that the commissioning of the Power of Siberia gas pipeline will make it possible to supply pipeline gas to the area. Today, Gazprom is building a pipeline branch to connect a gas distribution station (GDS) to the town of Tsiolkovsky (renamed from Uglegorsk in 2015). The design of an inter-settlement gas pipeline running from the GDS in Tsiolkovsky to the Vostochny Cosmodrome has been finalized. The Company has received an authorization from the state expertise agency and is planning to start building the pipeline shortly.

In addition, Gazprom has completed the design and estimate documentation for an inter-settlement gas pipeline towards the town of Svobodny and is designing a local pipeline branch and the Svobodny GDS.

The parties also discussed the implementation of the Gazprom for Children program. The Company is making preparations for the construction of five regional sports and health centers: two in the city of Blagoveshchensk and one each in the town of Tynda, the settlement of Magdagachi, Magdagachinsky District, and the village of Tambovka, Tambovsky District.

Background

Gazprom and the Government of the Amur Region signed the Cooperation Agreement.

The Amur Region is not receiving pipeline natural gas. Gazprom has developed a draft program for gas supply and gas infrastructure expansion in the region until 2026. The document is pending approval by the Government of the Amur Region.

As part of the Gazprom for Children program, 15 regional school stadiums and multi-purpose sports grounds were built in 2017 and 2018 in such cities and towns as Blagoveshchensk, Shimanovsk, Tynda and Zeya, as well as in villages in the Belogorsky, Blagoveshchensky, Bureysky, Magdagachinsky, Mazanovsky, Oktyabrsky, Tyndinsky and Zavitinsky districts.



Gazprom and VNG discuss development of Katharina UGS facility and sci-tech cooperation

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Ulf Heitmueller, Chairman of the Executive Board of Verbundnetz Gas (VNG), took place today in Moscow.

The parties discussed their ongoing and future cooperation, in particular the interaction in the field of underground gas storage (UGS) in Germany. It was noted that the joint project for the development of the Katharina UGS facility is in the active investment phase, with onshore structures built to completion. The facility has six operating caverns with the total working gas volume of 316 million cubic meters. A seventh cavern is under construction.

In addition, the meeting participants reviewed issues related to sci-tech cooperation between Gazprom and VNG.

Background

VNG is engaged in natural gas imports, underground storage and consumer supplies in Germany's eastern federal states and in Berlin.

Gazprom and VNG are working together on the Katharina UGS facility, a joint project implemented on a parity basis. When the facility reaches its design capacity in 2025, it will include 12 caverns with the working gas volume of some 650 million cubic meters and the daily withdrawal rate of 26 million cubic meters.