Gazprom targets 50% growth in EBITDA in 2021

Russia's Gazprom is targeting a 50% growth in core earnings (EBITDA) in 2021 to $30bn, the company's deputy chairman Famil Sadygov said at a press conference on June 16, noting that the Nord Stream 2 pipeline project was fully funded.

Gazprom has slashed its initial borrowing plan for the year by 100bn rubles ($1.39bn) to 411bn rubles, Sadygov said, although the company is looking to stage a Eurobond issue soon and is considering the euro, US dollar and Swiss franc as potential currencies. It also intends to launch a perpetual bond issue worth 150bn rubles by year-end.

Sadygov added that Gazprom aimed to raise financing for the large gas processing complex it is developing in Ust-Luga in 2022. The company formally broke ground on the facility in May.

"Financial consultants – VEB and Gazprombank – are preparing models and final options for financing opportunities," Sadygov said, adding that a 30-70 ratio between equity financing and borrowed funds was considered the most likely option for the project.

Gazprom is also seeking project financing for the Tambeyskoye, Layavozhskoye and Urengoyskoye fields in Siberia, in order to reduce its debt pile, Sadygov said. He ruled out a second public offering or an additional share issue at Gazprom, and nor is the company looking to downsize its 9.99% interest in Novatek.

Gazprom will also introduce a long-term incentive programme for its management in 2021, according to Sadygov, in an effort to improve corporate governance. It had hoped to take this step in 2022 but the coronavirus pandemic disrupted the process.