Gazprom instructed to proceed to pre-investment phase in Power of Siberia 2 project

Moscow, March 30 - Neftegaz.RU. CEO of Gazprom Alexey Miller briefed Vladimir Putin on March 28 on the ongoing activities in the autumn/winter period, the company's main accomplishments in 2019 and its plans for 2020. Particular attention was paid to the potential for enhancing gas supplies to Eastern Siberia and the work on the Power of Siberia 2 project.

Since the beginning of the withdrawal period, Gazprom has injected 72.232 billion m³ of gas into UGS facilities, and the daily deliverability has reached a record 843.3 million m3 of gas. Gazprom's production capacities amount to 545 billion m3 of gas, which means that, taking into account the reserves we have in our underground facilities.

As for last year's production volumes, the company produced 500.1 billion m3 of gas and exported 199.3 billion m3. The latter figure is slightly lower than in 2018, which was marked by a record 201.8 billion m3. Gazprom also preserved its share in the European market at 35.6 %.

Speaking of current market trends, there is a moderate downturn. Nevertheless, the company remain optimistic about the 3rd and 4rth quarters, and believe that the preparations for the winter season will be carried out as planned.

Concerns plans for 2020, the planned investment program totals RUB 1.080 trillion. The net debt/EBITDA ratio is 1.3, which is a good indicator in terms of investment rating. As of this date, Gazprom see no impending challenges to the execution of obligations regarding the financing of the investment program in 2020.

Gazprom plan to build 1,942 km of gas trunklines, bring 114 wells onstream, and put into operation 3 comprehensive gas treatment units with a capacity of 27.5 million m3 of gas. The company is also going to raise the amount of gas in UGS facilities by 180 million m3.

As for the linear part, there is the construction of a gas pipeline that will feed gas into Nord Stream 2 (Gryazovets – Volkhov – Slavyanskaya compressor station) and the continuing pre-development of a new field in the Yamal Peninsula – Kharasaveyskoye, which is another major asset that Gazprom currently working on for the new gas hub in Yamal.

About the possibilities for transiting gas to China across Mongolia via Power of Siberia 2, A.Miller reported that "the amount of supplies via this route may total up to 50 billion m3 per year... gas will be brought to western China, and will then serve the needs of consumers in China's main gas consumption centers."

Concerning connecting capacities in Eastern Siberia and European Russia, A.Miller said that a preliminary feasibility analysis has been carried out; it has shown that the project is feasible and cost-effective. Gazprom will start the pre-investment phase, in order to commence the development of a feasibility study and the design-and-survey works for the Power of Siberia 2 gas pipeline.