Alexey Miller briefs Vladimir Putin on Gazprom’s preliminary results for 2017

A working meeting took place today between Vladimir Putin, President of the Russian Federation, and Alexey Miller, Chairman of the Gazprom Management Committee.

Alexey Miller briefed Vladimir Putin on the Company’s preliminary results for the current year, focusing on Gazprom’s investment program for 2018 and 2019, the progress of its strategic projects, and its dividend policy.

Gazprom website Editorial Board

Shorthand record

Vladimir Putin: Mr. Miller, you wanted to talk about the Company’s performance in 2017 and its plans for 2018. Please proceed.

Alexey Miller: Mr. Putin, we expect the total amount of gas produced by Gazprom in 2017 to reach 470 billion cubic meters. That figure exceeds the 2016 result by more than 50 billion cubic meters, showing a growth of over 12 per cent. In addition, Gazprom’s annual gas production capacity will surpass 550 billion cubic meters by year’s end.

Gazprom’s overall supplies to the Russian market are projected to be up by 5 billion cubic meters in 2017, with consumption on the rise in the power, metal, agrochemical and cement industries.

As for exports, if the trend observed over the past 11 months continues – and in that period we delivered 13 and a half billion cubic meters more than in the same period of 2016 – Gazprom will set an all-time record for the Company’s gas exports with 192 billion cubic meters supplied in 2017.

As far as the Gasification Program is concerned, this year it involved the construction of 1,700 kilometers of gas pipelines and 160 boiler houses, as well as new gas connections in some 76,000 households and apartments located in over 200 population centers. We plan to increase the amount of funding for the Program in 2018 by 25 per cent.

On the whole, the investment programs for 2018 and 2019 will be the most ambitious in the Company’s history. The investments for 2018 and 2019 will total RUB 1,280 billion and 1,400 billion, respectively. As you know, Mr. Putin, it is related to the peak investment needs for the implementation of our crucial strategic projects. At the same time, those projects have a deadline – the end of 2019. That includes the start of gas supplies to China via the eastern route (the Power of Siberia gas pipeline), the pre-development of the Chayandinskoye field, the construction of the Amur Gas Processing Plant, the commissioning of the TurkStream gas pipeline in late 2019 and the creation of gas transmission capacities in the northern corridor, in northwestern Russia, for delivering gas from Yamal to consumers in Russia and exporting it via Nord Stream 2.

Although the Company’s investments will grow in the next two years, we will absolutely continue to pursue a well-balanced dividend policy. The amount of dividends is currently over RUB 190 billion. Despite the expansion of Gazprom’s investment program, the dividends will remain at the same level in the near future – RUB 190 billion.

As a result, in the next two years Gazprom will fulfill all of its obligations under the main strategically important investment projects, honor its commitments to consumers in Russia and abroad in terms of gas supplies, and secure gas deliveries during the autumn/winter peak, of course.

Vladimir Putin: Very good. I would like to congratulate you and all employees of Gazprom on those results. Those are excellent results and the growth in both exports and domestic supplies is impressive. I expect all your plans for 2018 to succeed. Good luck.