Gazprom Output Slides 10% in 2020
Russia's Gazprom is on track to produce 452bn m3 of gas in 2020, CEO Alexei Miller said on December 24 in a pre-New Year speech, down nearly 10% from the 500bn m3 it extracted last year.
Miller said it had been a "challenging" year, but "we see an upward trend in terms of supply. And we see that prices are also growing." Gas demand contracted in Europe this year as in most other markets because of the impact of coronavirus lockdowns, weakening Gazprom's sales.
Gazprom has some 100bn m3 of production capacity spare, the CEO said, implying that the company could supply as much as 550bn m3/year. Exports are expected to come to 179bn m3 this year, he said, noting that this represented the company's fifth-highest annual shipments abroad on record.
It is unclear whether Miller was referring to all exports or only those to the so-called far abroad, or countries outside the Commonwealth of Independent States. Gazprom's overall exports came to 233.2bn m3 in 2019, while far abroad sales came to 199bn m3.
Miller pointed to some positive developments, despite the declines in production and exports. The situation with exports developed "very favourably" in the second half of the year, he said. A monthly record of 17.4bn m3 of gas were sold in the far abroad in October, and supplies to nine European countries were higher in 2020 than in 2019, including the Netherlands, Slovakia and Turkey. "Europe will remain our very important gas supply partner for a long time to come," he said. However the company also has an eye on exporting more to China and is planning a second pipeline to join Power of Siberia, through which more gas is flowing now than had been planned.