Gazprom Approves 2018 Investment Budget
Gazprom's total investments in 2018 will total 1,278.83 bn rubles ($21.9bn at current exchange rates), the first time its planned annual investments will have topped a trillion rubles.
This represents an increase of one-third, compared with its base program for 2017. Its investment program and budget for 2018 were approved by Gazprom's board November 23.
Next year's planned capital investments will amount to 798.428bn rubles. Expenditures on acquiring non-current assets will be 40.983bn, while long-term financial investments will be 439.419bn rubles. According to Gazprom's draft budget, external financial borrowing will be 416.971bn rubles; its plan envisages fully covering its liabilities.
Gazprom's 2018 investment programme covers all its strategically important projects including: the Chayandinskoye field development; construction of the Amur gas processing plant; the Power of Siberia, TurkStream and Nord Stream-2 pipelines under construction; development of the gas transport system in northwest Russia; and projects that ensure a peak gas balance for medium-term perspective.
The company also noted that in 2016 Gazprom set a record for exports to the 'far abroad' (western and LNG markets) of 179.3bn m3, and that exports have continued unabated so far this year, with Gazprom having supplied 170bn m3 to such markets as of November 22, a year on year increase of 13.3bn m3 (up 8.5%), meaning even without allowing for the additional gas exports used to supply Ukraine since 2016, its exports are growing.
The board also discussed renewable energy sources: it noted that poor weather conditions in winter 2016-2017 led to a decline in German wind and solar power generation, necessitating all the country's gas and coal power stations to be ramped up to full capacity, including those shut down and scheduled for closure; and that it had been necessary to import electricity from neighbouring countries.
"The current situation clearly demonstrates the negative technological aspects associated with the excessively rapid integration of renewable energy sources into the country's energy supply systems," the board said – perhaps overlooking the reality that in December 2016/January 2017 it was outages at French nuclear plants that required France to import fossil-fuel generated power from all its neighbours, including Germany.
Rising European gas hub prices will make imports of US LNG more attractive over the winter but Gazprom's board stressed that the events of 2017 did not lead to a significant revision of the long-term forecast for the development of world energy. In the face of declining domestic production in Europe, "Gazprom will remain the largest and most reliable gas supplier in the region," it said.