Speech by Alexey Miller at conference call on occasion of New Year’s Eve

Dear colleagues,

On behalf of the Management Committee and on my own behalf, let me wish you a merry Christmas and a happy New Year!

It has been a very productive year. Our investment activity has reached its peak. All of our strategic projects have been going at a vigorous pace. The tasks set before the Company have been fully accomplished.

In the Yamal Peninsula, we have brought onstream the third gas production facility of the Bovanenkovskoye field, getting the field to its design capacity of 115 billion cubic meters of gas per year. Bovanenkovskoye is so rich in resources that we will continue extracting them for the next 110 years until 2128. And we know precisely how much gas will be produced annually. This perfectly shows the high level of detail and the time horizon we use in our work.

Conference call on occasion of New Year’s Eve
Conference call on occasion of New Year’s Eve

Sergey Menshikov, Director General of Gazprom Dobycha Nadym, speaking at conference call on occasion of New Year’s Eve

In order to organize deliveries of the increasing amounts of natural gas from Yamal, we put the Ukhta – Torzhok 2 gas pipeline into operation in December. It is a new trunkline in the northern gas transmission corridor, which is becoming the most important and key route of the Unified Gas Supply System, as it provides gas to Russian and foreign consumers. We will consistently expand the northern gas transmission corridor in the future.

In northwestern Russia, we are building new capacities stretching towards Ust-Luga. That is the starting point of the Nord Stream 2 gas pipeline. In September, we began laying this pipeline in the Baltic Sea. Upwards of 380 kilometers is already completed. Work is currently underway in the exclusive economic zones of Finland and Sweden, as well as in German and Russian coastal areas.

Another example of our ability to implement ambitious projects quickly is the TurkStream project. In November, we completed offshore pipelaying for two strings of this gas pipeline ahead of schedule. It was done in record time. I would like to note that we have broken a number of world records. For the first time ever, the laying rate of a deep-water offshore gas pipeline reached 6,330 meters per day. In another first, a 812-millimeter-wide pipe was installed at a depth of 2,200 meters.

It is planned to bring Nord Stream 2 and TurkStream into operation in 2019. They will give us new, reliable and highly efficient routes for exporting Russian gas to Europe.

As we can see, the demand for Russian gas is skyrocketing. This year, we will hit an absolute record for gas exports to Europe for a third time in a row. Total exports will exceed 201 billion cubic meters. We are only a step away from the maximum annual contracted volumes that we have in all of our contracts for gas exports to Europe. I can say without a doubt that our cooperation with foreign partners will take into account the new circumstances.

Demand is on the rise in the domestic market. By the end of 2018, our gas deliveries via the Company’s gas transmission system will exceed last year’s figures by 12 billion cubic meters.

Conference call on occasion of New Year’s Eve
Conference call on occasion of New Year’s Eve

Shamil Sharipov, Director General of Gazprom Transgaz Ufa, speaking at conference call on occasion of New Year’s Eve

Gazprom demonstrates robust results amid the growing demand. This year, our production will total about 497.6 billion cubic meters of gas, an increase of 26.6 billion cubic meters from 2017.

Next year, we will deliver our pipeline gas to China for the first time ever. This is undoubtedly a milestone event. Gas supplies will begin on December 20 via the Power of Siberia gas pipeline. In fact, the countdown is on: very little time is left before this historical event. This year, we completed the bulk of the construction work for the linear part of the Power of Siberia gas pipeline; pre-development of the Chayandinskoye field, meant to provide first gas to the Chinese market, is well underway.

Extensive construction is in progress at the Amur Gas Processing Plant. It will be the most high-tech plant with the second most powerful infrastructure in the world. By now, the Amur GPP project is completed by as many as 24 per cent.

Dear colleagues,

Our domestic activities are an absolute priority. We have been running a large-scale program for gas infrastructure expansion in Russian regions for 13 years now. Over the past year, Gazprom has connected more than 200 population centers to gas grids. This work will no doubt be continued.

I would like to highlight the issue of gas supplies to the Kaliningrad Region. We recently completed the construction of a local facility that is unique to our country: a marine terminal for receiving liquefied natural gas. It will be put onstream soon, making it possible to supply natural gas to that region both by pipelines and by sea. To that end, a special regasification vessel named after Alexander Vasilevsky, Marshal of the Soviet Union, was built at the order of Gazprom. The alternative way of gas delivery will raise the energy security of the Kaliningrad Region to a new level.

The passing year will be remembered for a number of other significant events. Gazprom Neft has discovered a new large field, Triton, on the shelf of the Sea of Okhotsk. It ranks among the three largest global oil and gas discoveries of 2018.

Gazprom Energoholding has brought onstream the first power unit of the Grozny TPP. The facility is vital to the power supply of southern Russia. In 2019, we will launch the second power unit and complete the implementation of our program under capacity supply agreements.

Dear colleagues,

Thank you for your excellent and efficient work throughout the past year, for your consummate professionalism and commitment. 2018 was a difficult and challenging year. 2019 will be just as challenging. Yet I am convinced that we will complete every task lying ahead of Gazprom with perfect confidence.

I would like to once again wish you a merry Christmas and a happy New Year!

I wish you and your loved ones happiness, good health, and all the best!

Now, let us go on with our work.