Gazprom invests RUB 242.5 billion into Russian regions gasification within ten years

Kirill Seleznev

 

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On the threshold of Gazprom’s annual General Shareholders Meeting the Company’s headquarters hosted today Press Conference “Gas Supply to Domestic Market. Executing Russian Regions Gasification Program”. Taking part in the Press Conference was Kirill Seleznev, Member of the Management Committee, Department Head, Gazprom; Director General, Gazprom Mezhregiongaz.

It was pointed out at the Press Conference that Gazprom Group was the largest gas supplier to the domestic market. In 2014 Gazprom Group sold 217.2 billion cubic meters of gas (not including intra-Group supplies) – a 4.8 per cent fall versus 2013. A certain influence on this indicator was exerted by natural and climatic factors as well as an economic downturn, which led to a drop in gas consumption in the power industry, cement industry, metallurgy and agrochemistry. At the same time, independent gas producers operating in the deregulated sector offer their gas to major and sound consumers in high-yield regions at prices lower than the regulated ones.

Nevertheless, Gazprom’s proceeds from gas sales in the Russian market reached RUB 798.1 billion in 2014 surpassing the 2013 level by 3.1 per cent. Gazprom’s average gas selling price in the domestic market also rose versus 2013 by almost RUB 280 to RUB 3,673.8 per 1,000 cubic meters.

The Russian Regions Gasification Program remains one of Gazprom’s priorities in the domestic market.

It was noted that from 2005 to 2014 Gazprom’s total investments in the Gasification Program had averaged RUB 242.5 billion. The investment figures came to RUB 28.8 billion in 2014. The same volume of Program financing is planned for 2015.

Between 2005 and 2014 Gazprom constructed 1,802 gas pipelines with a total length exceeding 25 thousand kilometers, secured gasification of 4,006 boiler houses, over 700 thousand apartments and households. Particularly in 2014 the Company built 105 gas pipelines with a total length of some 1.4 thousand kilometers and secured gasification of 200 boiler houses, 29.6 apartments and households.

As a result of the Russian Regions Gasification Program executed between 2005 and 2014, Russia’s average gasification level rose from 53.3 to 65.4 per cent.

One of the crucial problems hampering the development of gas supply and gasification in the domestic market is a growing consumer debt for the gas supplied. In 2014 the overdue debt of all consumer groups to Gazprom Mezhregiongaz Group rose by 9.4 per cent to RUB 126.7 billion. During Q1 2015 the overdue debt grew by another 28.9 per cent to RUB 163.3 billion.

Heat supplying companies account for over 30 per cent of the total debt, their share in gas consumption by all consumers being 13 per cent, while the population with an 18 per cent share accounts for over 38 per cent of the total debt.

The Kaliningrad, Moscow, Novgorod, Rostov, Saratov, Volgograd Regions, the Krasnodar, Khabarovsk and Stavropol Territories, the Republics of Adygea, Karelia and Komi considerably lag behind in implementing their liabilities. The liabilities are not fulfilled by the Republics of Dagestan, Ingushetia, North Ossetia – Alania and Karachay-Cherkessia.

The regions with the highest gas debts and non-fulfilled liabilities for consumer preparation for gas supplies see a reduction of Gazprom’s investments into the gasification development. In addition, no new gas supply facilities are being built there and only the construction of facilities launched in previous years is still underway.

The Press Conference also addressed the Company’s future activities in Russia’s regions.

Gazprom website Editorial Board

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