Vladimir Mayorov: A positive example
March 29, 2012, the interview was taken by Sergey Pravosudov
The material is prepared jointly by Gazprom website and Gazprom Magazine Editorial Boards and will be published in corporate Gazprom Magazine Issue 4
Vladimir Mayorov, Director General of Beltransgaz answers the questions.
- Mr. Mayorov, what were Beltransgaz operational and financial figures at the end of 2011?
In 2011, 44.3 billion cubic meters of Russian gas were conveyed through Belarus to Europe, that is 2.3 per cent more than in 2010. We supplied 20 billion cubic meters of gas to the domestic market. In 2011, Beltransgaz investments totaled RUB 1.3 billion. Talking about financial results, 2011 turned out to be very difficult for us. Three-time devaluation of the Belarusian ruble didn’t allow Beltransgaz to make profit in 2011, since we bought gas for dollars and sold it for Belarusian rubles. Hence, we are not able to pay dividends to our shareholders. Although previously 80 per cent of Beltransgaz net profit were directed for dividends payment.
In the current year, the gas transit is expected to be around 48 billion cubic meters (4 billion cubic meters more than in 2011). We are planning to supply 21.5 billion cubic meters of gas to the domestic market in 2012
- What are the plans for 2012?
In 2012 we are aimed to work without losses and to gain profit sufficient for effective financial and economic activities and large-scale investment projects implementation. The gas transit is expected to be around 48 billion cubic meters (4 billion cubic meters more than in 2011). In general, the total throughput of the Yamal – Europe gas pipeline equals 33 billion cubic meters, the Beltransgaz gas transmission system – nearly 30 billion cubic meters. However, the Beltransgaz system is used only by 50 per cent due to the low demand for gas in the countries consuming Russian natural gas. We are planning to supply 21.5 billion cubic meters of gas to the domestic market in 2012. The Belarusian economy is gradually recovering and it needs more gas. Besides, considerable reduction of the gas purchase price (from USD 306 to 166 for 1 thousand cubic meters) will boost gas supplies.
- Tell us, please, about modernization of the gas transmission system (GTS) and underground gas storage (UGS) facilities.
The investment program for 2012 is estimated at RUB 1.8 billion. It will be implemented at the cost of amortization expenses of Beltransgaz. The investment program was approved by experts of Gazprom’s specialized departments and confirmed by our Supervisory Board. In the current year we are preparing to upgrade equipment at 26 gas distribution stations.
Regarding the underground gas storage facilities, there are currently three of them in Belarus: Osipovichskoye, Pribugskoye and Mozyrskoye with the total capacity of approximately 1 billion cubic meters. The Osipovichskoye and Pribugskoye UGS facility are situated in water-bearing layers and have low well production rate. Their aggregate current gas yield is 8 million cubic meters. The Mozyrskoye UGS facility located in salt caverns, allows us to withdraw 10 million cubic meters of gas per day.
Working gas capacity of the Mozyrskoye UGS facility equals 150 million cubic meters. We expect to increase it to 1 billion cubic meters by 2025
The Pribugskoye and Mozyrskoye UGS facilities are currently being expanded. The working gas capacity of the first one is 450 million cubic meters, and we are planning to increase this figure to 600 million cubic meters by 2015. Working gas capacity of the Mozyrskoye UGS facility equals 150 million cubic meters. We expect to increase it to 1 billion cubic meters by 2025. Regarding this topic, we are closely collaborating with the Mozyrsalt enterprise, which is engaged in salt extraction and hand over the caverns to us. Moreover, we on our own wash out saliferous rock. There is a project of a soda ash plant construction near Mozyr. If it is implemented, Beltransgaz will be able to sell the obtained salt waters and to improve the economy of the Mozyrskoye UGS facility’s expansion. As a result, by 2020 the total capacity of our UGS facilities may reach 2 billion cubic meters.
Gas in motors
- Are you planning to develop gas filling stations network?
So far, this business does not bring us substantial revenue, but we believe in its potential, as gas in motors is more profitable than gasoline and is more eco-friendly. At present, Beltransgaz operates 25 stationary CNG filling stations with the capacity of 160 million cubic meters of gas per year, but these facilities are used only 13 per cent. In particular, last year 16.6 million cubic meters of CNG was sold. Another 1.6 million cubic meters of CNG was used for its own vehicles (426 NGVs). Last year our experts reequipped 197 vehicles for CNG. In addition, in 2011 Belarus imported 340 NGVs from abroad. This year we will launch a new gas filling station in Mozyr, in 2013 – two more in Maladzyechna and Pinsk. We are collaborating with authorities, as well as with business entities, explaining to them the benefits of the conversion of public and commercial transport to gas. Given that the price for methane is half the price for gasoline and diesel fuel.
- How can an increase of Gazprom’s share to 100 per cent affect Beltransgaz?
Becoming the sole owner of our company, Gazprom has guaranteed reliable transit of its gas. So, it is not surprising that the volume of gas transmission through Belarus has started to increase this year. Due to the transit growth, the profitability of our company is going up, and, consequently, it benefits the owner. The intergovernmental agreement between Russia and Belarus, which was signed along with Gazprom’s purchase of the remaining 50 per cent stake in Beltransgaz, minimizes the investment risks of the Russian company. In particular, the document stipulates that Beltopgaz companies should pay us for the gas in the foreign currency. Thus, we have a guarantee that the last year situation will not happen again. Besides, the addition to gas price, received by Beltransgaz, is fixed.
We, in turn, have received an access to all Gazprom resources – both informational and financial. As a result, the efficiency of our team’s work will increase.
- What are the company employees expecting from the new owner?
People are the main resource of any company. We managed to save our unique six thousand team even in difficult conditions of the last year. The decision of Gazprom to increase salaries was appreciated by our employees. I want to emphasize that people are aware that this is an advance, which should be paid for with increased operating efficiency. Currently, we are working at unifying the parameters of our work with the Gazprom’s specialized departments. In addition, we are planning to participate in all corporate activities of Gazprom. We have already decided that in 2013 the corporate Fakel festival will be held under the auspices of Beltransgaz.
- Has the attitude of Belarusian state and society towards Beltransgaz changed when Gazprom became the owner of the company?
Gazprom is an old and reliable partner of Belarus. The entry of Beltransgaz into Gazprom Group has not changed the attitude of the state and society to our company. Everybody laud the deal. After all, the money paid by Gazprom greatly helped our country go out of the financial crisis. Furthermore, the gas price for Belarus was cut almost by half, what cannot but gladden the consumers. Alexey Miller, Chairman of Gazprom's Management Committee decided to build a new Beltransgaz office in Minsk, which will house representatives of other Gazprom Group companies and of the Russian business as well. I am sure that Beltransgaz will have enough money to build this edifice.
- Tell us, please, about social and charity projects of Beltransgaz.
We support several sports federations, schools, orphan homes and religious organizations. In 2010–2011 Beltransgaz contributed to the charity over USD 1 million to 40 organizations. We are not general sponsor of any hockey or football team. Although I must admit, many Belarusians hope that with Gazprom our policy will change and a more significant part of the profit will be cumulatively aimed at supporting any sports club. In addition, we have received a special task from Gazprom – to make suggestions of Beltransgaz participation in the Gazprom for Children program.
- In the USSR there was a unified gas transmission system, which was then divided among the independent states. In your opinion, is it possible to reunite it and is it worth doing?
In technical terms, this system was not destroyed, since the dispatch services are always working in close cooperation. Although it is clear that the state of gas trunk lines in these countries differs significantly. In some countries close attention is paid to upgrade of the gas transmission system and substantial investments are directed to it, while in others the subject may be viewed, as they say, in a slipshod manner, that puts in doubt reliable gas transit. From my part, I want to emphasize that both Russia and Belarus have benefited from Beltransgaz affiliation to Gazprom. I believe that our experience can be a positive example for the Ukrainian colleagues.
Both Russia and Belarus have benefited from Beltransgaz affiliation to Gazprom
The gas transmission system, used by Beltransgaz, consists of 7,490 kilometers of gas pipelines, 5 line compressor stations, 3 underground gas storage facilities, 233 gas distribution stations, 25 CNG filling stations, 7 gas metering stations. Besides, Beltransgaz is operating 575 kilometers of the linepipe of the Yamal – Europe gas trunkline and 5 compressor stations. Russian natural gas transit supplies to Kaliningrad Region, Lithuania, Ukraine and Poland are carried out via gas trunklines running through Belarus.