Russia's Gazprom expands 2022 investment plan
Russia's state gas supplier Gazprom announced on September 22 that its management committee had approved a 13% increase in its investment programme for 2022 to 1.98 trillion rubles ($33.4bn).
Gazprom also raised its target for capital expenditure by 319.1bn rubles to 1.75 trillion rubles, citing its need to fund the development of gas fields on the Yamal Peninsula in the Russian Arctic and the eastern Russian regions of Irkutsk and Yakutia.
The company links its investments closely to how much money it earns in a given year. It made a record 2.5 trillion rubles in net profit in the first half of this year, as soaring gas prices in Europe more than offset the impact of steep reductions in volumes.
Gazprom has curbed gas flow to Europe to a record low this year, after some buyers refused to pay for supplies in rubles and were subsequently cut off, and it began reducing deliveries via the Nord Stream 1 pipeline in June. The pipeline was turned off completely at the end of August, with Gazprom citing technical problems caused by its inability to get equipment repaired due to sanctions. European leaders have condemned the cuts as politically motivated.
The expansion of Gazprom's investment plan comes after the company announced at the end of August that it would bring the Kovyktinskoye gas field in Irkutsk on stream by the end of the year. The field will flow gas to China via the 38bn m3/year Power of Siberia pipeline, complementing volumes from the Chayandinskoye field in Yakutia.
Russia is meanwhile negotiating with China on the development of Power of Siberia 2, which would connect fields on the Yamal peninsula, currently linked to the European market, to China via Mongolia. Gazprom CEO Alexei Miller said on September 15 he expected final agreements to be reached with Beijing on the pipeline "in the near future."
Gazprom's deputy chairman, Famil Sadygov, said on September 22 that the company would continue focusing on cost control and maintaining a balanced cash flow, in spite of its strong financial results this year.