Board of Directors approves Investment Program, Budget and Cost Reduction Program for 2014
The Gazprom Board of Directors took notice of the information on the Company's preliminary operating results for 2013, projected Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2015–2016.
The Board of Directors approved Gazprom's Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2014 in the version reviewed by the Government of the Russian Federation.
Pursuant to the Investment Program for 2014, the total amount of investments will make up RUB 806 billion. At the same time, the amount of capital investments will account for RUB 701.11 billion, of which RUB 698.21 billion and RUB 2.9 billion will be allocated for capital construction and acquisition of non-current assets accordingly. The amount of long-term financial investments will total RUB 104.89 billion.
According to the approved Budget for 2014, gains from operating and investment activities will total RUB 5.552 trillion, while the amount of payments in all activities – RUB 5.651 trillion. The external financial borrowings will stand at RUB 90 billion. The Budget surplus (taking into account intragroup borrowings and beginning balances on Gazprom's accounts as of early 2014) will account for RUB 0.5 billion.
The 2014 Investment Program was formed based on the need of implementing Gazprom's major investment projects for gas production and supply within the preset timeline.
Pursuant to the 2014 Investment Program, the top priority in capital construction costs allocation will be given to the comprehensive development of the Yamal Peninsula fields. In particular, the funds are to be allocated for the pre-development of the Cenomanian-Aptian deposits of the Bovanenkovskoye field, where in 2014 it is planned to launch a 125 MW booster compressor station, gas treatment units with an aggregate capacity of 30.1 billion cubic meters a year and 93 wells.
The main priorities in the area of gas transmission are the construction of the Bovanenkovo – Ukhta gas trunkline system and the implementation of the Southern Corridor project.
Funds will be also channeled for developing the underground gas storage system, namely for expanding the Punginskoye and Kasimovskoye UGS facilities as well as retrofitting the Sovkhoznoye and Severo-Stavropolskoye UGS facilities and the Peschano-Umetskoye UGS station.
The 2014 Investment Program also envisages investments into constructing and expanding the gas processing capacities, retrofitting gas transmission facilities, re-equipping, retrofitting and expanding gas production facilities, performing production drilling in fields and UGS facilities as well as conducting geological exploration.
The long-term financial investment plan for 2014 provides for Gazprom's involvement in implementing the South Stream project, constructing an LNG plant near Vladivostok and financing the activities of Gazprom Gazomotornoye Toplivo for promoting natural gas use as a vehicle fuel.