Alexey Miller holds conference call marking 25th anniversary of Gazprom

Alexey Miller, Chairman of the Gazprom Management Committee, today held in Moscow a conference call marking the 25th anniversary of Gazprom.

The event was broadcast live to 54 companies of the Gazprom Group.

Gazprom website Editorial Board

Shorthand record

Dear colleagues,

Please accept my heartfelt congratulations on an important landmark: 25 years have passed since the founding of Gazprom.

Over those years, we have done a tremendous amount of work. Gazprom has built a solid foundation for Russia’s gas industry development in the 21st century, becoming a leader in the global energy market.

We hold the world’s largest natural gas reserves, managing this unique resource base in a sustainable way. Our gas reserve addition rates have stably surpassed production rates since 2005. In a quarter of a century, we have added 10.5 trillion cubic meters of gas to our reserves through geological exploration. As a point of comparison, this amount is significantly larger than the total proven reserves of the United States.

We are entering new territories and shaping large gas production centers. From the ground up, we have created major gas production capacities in the Arctic, namely in the Yamal Peninsula. We are bringing Bovanenkovskoye, Yamal’s largest field, to its design output of 115 billion cubic meters of gas per year.

We are shaping a full-fledged gas sector in the east of Russia. The Sakhalin and Kamchatka gas production centers are already in operation, while the development of the Yakutia and Irkutsk centers is in full swing.

Eventually, the bulk of Russian gas will be produced in the Arctic and in the eastern part of our country.

We have opened a qualitatively new stage in the development of Russia’s Unified Gas Supply System. We have created the world’s most cutting-edge gas pipelines designed for the working pressure of 120 atm. I am speaking about the Bovanenkovo – Ukhta and Bovanenkovo – Ukhta 2 gas pipelines. We have built the Ukhta – Torzhok gas pipeline and are now constructing Ukhta – Torzhok 2. They are all integral to the northern gas transmission corridor that links the new gas production center in Yamal to consumers in European Russia and across Europe. The northern corridor is becoming a key route for the UGSS.

In parallel with building new gas pipelines in Russia, we have expanded the capacity of our underground gas storage system. Its maximum daily deliverability has added 30 per cent in the past seven years, growing 2.6-fold compared to the 1993–1994 season and reaching 805.3 million cubic meters. Over that period, the working gas inventories have doubled, totaling 72.2 billion cubic meters. As you know, that is the historical amount of gas injected into UGS facilities by the start of the autumn/winter period.

Thanks to the intensive development of our large production complex, we can confidently perform our core mission of providing domestic consumers with reliable gas supplies. Gazprom is the only company in Russia that can promptly increase gas deliveries and meet peak demand.

We have assumed the responsibility to maintain the reliable functioning of the gas sector in Belarus, Armenia, and Kyrgyzstan.

Gazprom has earned a reputation as a trustworthy and responsible exporter of gas internationally. The Company is the largest supplier of gas to Europe and Turkey. In 25 years, we have almost doubled our deliveries to those markets, hitting an all-time high for Gazprom in 2017 with 194.4 billion cubic meters. In the last three years alone, our gas exports have grown by nearly a third.

Europe’s indigenous gas production is steadily declining. The demand for Russian gas is bound to grow in the long term. This is why we are building new, highly reliable and efficient export gas pipelines. Six years ago, we put the Nord Stream gas pipeline into operation in Western Europe. The pipeline has been in great demand by consumers: on some days, it goes beyond 100 per cent of its design capacity.

Today, we are implementing a new project – Nord Stream 2. The permit issued by the German federal authorities in late January gives us the opportunity to start building the most important section of the gas pipeline, which is located in German territorial waters and in the area of the receiving terminal in Greifswald. The launch of Nord Stream 2 will double the annual throughput of our gas pipelines in the Baltic Sea, bringing it to 110 billion cubic meters of gas, and will complete the formation of the northern gas transmission corridor outside Russia. It is the shortest and most cost-effective route for Russian gas supplies to northwestern Europe.

In the south of Europe, we are building another gas pipeline, TurkStream, which stretches across the Black Sea. It will make our gas supplies to Turkey and southern and southeastern Europe more reliable.

Dear colleagues,

We are now on the verge of a historic event. On December 20 next year, Russian pipeline gas will be supplied, for the first time ever, to China – the world’s fastest-growing market. We are going to pump more than 1 trillion cubic meters of gas to the People’s Republic of China within the next 30 years.

To achieve that goal, the most ambitious investment project in the global gas industry is in full swing in eastern Russia. We are pre-developing Chayandinskoye, a giant field in Yakutia, as well as laying the high-capacity Power of Siberia gas pipeline and building the Amur Gas Processing Plant, which is going to be the biggest in Russia and the world’s second largest in terms of capacity.

We are developing liquefied natural gas (LNG) trade. Gazprom was the first domestic company to enter the global LNG market. Since 2005, Gazprom’s LNG has been delivered to 15 countries across the globe. Russia’s first LNG plant was put into operation in Sakhalin. Today, preparations are being made for its expansion. Another project on the agenda is Baltic LNG.

Gazprom, with its unique expertise, is engaged in hydrocarbon exploration and production projects in 17 foreign countries in such regions as Africa, the Middle East, Asia-Pacific, and Latin America.

Together with our foreign partners, we have built and are operating eight UGS facilities in Europe. We are also developing the region’s NGV segment. Around 60 natural gas filling stations of Gazprom are available in Germany, Poland, Serbia, and the Czech Republic.

Dear colleagues,

Gazprom has significantly expanded its operations in the energy business over 25 years, and today, in addition to natural gas, it is also active in the oil and power generation industries. We have made great strides in these areas, too.

Within a quarter of a century, we raised our oil production 40-fold – up to 41 million tons in 2017. Our subsidiary Gazprom Neft is the best performing company among Russia’s oil majors. Five years ago, we became pioneers in developing the Russian Arctic shelf by launching production at the Prirazlomnoye field. In Yamal, we are creating a new oil province: in 2016, we commissioned the unique Arctic Gate oil loading terminal for year-round oil shipments via the Northern Sea Route.

We evolved into one of the leading producers of thermal and electric power among Russian heat generating companies. In 10 years, we put into operation 8.5 GW of new high-performance power units across Russia. The aggregate capacity of our power plants is about 39 GW, which translates into one-sixth of the total capacity of the national power grid.

Dear colleagues,

Gazprom’s extensive efforts are highly important for the socio-economic development of the regions, as they give an impetus to the development of related industries.

Our top-priority social project, which has national significance, is the Gasification Program. Extensive work is underway. Since 2005, the Company has allocated about RUB 325 billion for these purposes. The average national gas penetration level has been raised from 53.3 per cent to 68.1 per cent. The gas penetration level in rural areas has grown 1.7-fold. And these are very substantial figures. They mean that every year tens of thousands of families across Russia gain access to the benefits of natural gas. This is a whole new quality of life.

We are also implementing another large social project – Gazprom for Children. Over 1,600 modern sports facilities, including 120 sports and health centers, have been built throughout the country in 10 years. Before that, children and teenagers in many locations did not have the opportunity to engage in sporting activities in a comfortable environment. Now, more than 100,000 people visit those sports facilities.

For many years, Gazprom has been taking consistent steps toward import substitution, fostering Russian science, technological developments and upgrading of the national industry. A case in point is pipe production. As a result of our close cooperation over a long-term period, pipe manufacturers have started to produce state-of-the-art, internationally competitive products that meet the high requirements of Gazprom. This is why 100 per cent of the pipes we purchase today are produced in Russia.

Dear colleagues,

The scale of Gazprom’s activities, as well as the state-level challenges that we handle, carries with it great responsibility. I have no doubt that all of our projects will be successfully completed. The key to our success is your exceptional professionalism, peerless dedication, and coordinated work in every area and at every workplace.

Dear colleagues, thank you for your efforts. I am especially grateful to the veterans who laid the groundwork for Gazprom’s current achievements.

I would like to wish you further success in your endeavors, happiness, good health, and well-being.

Congratulations! Happy anniversary!

Let us go on with our work.

Gazprom — 25th anniversary

No. 1
  • globally in terms of natural gas reserves
  • globally in terms of natural gas production
  • globally in terms of length and capacity of gas transportation system
  • among Russian companies measured by gas processing
  • in Russia by installed power generating capacity and electric power output in thermal power generation
  • gas exporter to the European market

Effective development of resource base

80
hydrocarbon fields discovered over 25 years
10.5
trln m 3
of gas
added by Gazprom in the 25 years of geological exploration

New gas production centers

Yamal, Irkutsk, Yakutia, Sakhalin, and Kamchatka

300
bln m 3
of gas per year
expected to be produced from the Yamal center
483
bln m 3
of gas per year
aggregate design capacity of new production facilities put in operation over 25 years

Development of gas transmission capacities

The northern gas transmission corridor replaces the central corridor

115
bln m 3
of gas per year
aggregate capacity of Bovanenkovo — Ukhta and Bovanenkovo — Ukhta 2, the world’s most cutting-edge onshore gas pipelines
90
bln m 3
of gas per year
aggregate capacity of the high-tech Ukhta — Torzhok and Ukhta — Torzhok 2 gas pipelines
110
bln m 3
of gas per year
aggregate capacity of the Nord Stream and Nord Stream 2 gas pipelines

Underground gas storage in Russia

2.6
–fold
rise in the potential maximum daily deliverability of UGS facilities over 25 years
805.3
mln m 3
of gas
potential maximum daily deliverability of UGS facilities by the 2017–2018 withdrawal season
2
–fold
expansion of the working gas inventories prior to withdrawal seasons over 25 years
72.2
bln m 3
of gas
in the working gas inventories by the 2017–2018 withdrawal season

Gas exports to Europe and Turkey

1.9
–fold
growth in Russian gas exports to Europe and Turkey over 25 years
194.4
bln m 3
of Russian gas exported to Europe and Turkey in 2017 

Oil and power generation businesses

40
–fold
growth in oil production by the Gazprom Group over 25 years
40.98
mln t
of oil extracted by the Gazprom Group in 2017
39
GW
aggregate output of the Gazprom Group’s power plants
8.5
GW
of new capacities brought onstream under the CSA program since 2007 

Gas supplies in Russia

324.65
RUB billion
invested in gas grid expansion in 2005–2017
864
thousand
households and apartments connected to gas under the Gasification Program
1.3
–fold
gas grid expansion in Russian regions since 2005 
68.1
%
average gas penetration level in Russian regions as of January 1, 2018 
1.7
–fold
gas grid expansion in rural areas since 2005 
58.7
%
gas penetration level in rural areas as of January 1, 2018 

Charity

1,600
state-of-the-art sports facilities built in Russia under the Gazprom for Children program since 2007