Gazprom pipelines and export capacity

Газопроводы Газпрома и экспортные мощности

Gas pipelines of West Siberia

Газопроводы Западной Сибири

Export flows of Gazprom

Экспортные потоки

Spot, Gazprom, Brent

Цены на нефть и газ

End-use price of gas

Russia and USA

Daily gas production

Суточная добыча

Gazprom to export gas only by its own pipelines

Press secretary of the CEO of Gazprom Sergey Kupriyanov has kindly allowed me to write about our brief communication on the export pipeline policy of Gazprom. According to Mr. Kupriyanov, Gazprom plans to export gas to Europe only by pipelines that it owns by at least 50%. Sergey Kupriyanov gave the following list of what he called "our" pipelines (pipelines nostrum).

Acceptable Export Pipelines of Gazprom

 Pipeline name  Capacity, bcm/year
 Blue Stream 16
 South Stream 63
 Yamal-Europe 33
 Nord Stream 55
 Vyborg-Imatra 6
 Kobrin-Brest (1) 5



(1) This pipeline was not in the list, though it is fully controlled by Gazprom.

Remarkably, the whole transit system of Ukraine with its total export capacity of 142 bcm/year is out of the picture. The combined capacity of pipelines nostrum is slightly above the minimum volume of 158 bcm/year guaranteed by long-term contracts of Gazprom for 2020-2025.

In my view, the ownership test of Gazprom gives Ukraine a theoretical chance to add its pipelines to the Kupriyanov's list  raising the total Russian export capacity to 320 bcm/year. However, a 50% Gazprom's control over the Ukrainian transit system would be a serious blow to the South Stream project (and a great news for the minority shareholders of Gazprom).

Actually, the minority shareholders should be concerned about the export pipeline construction plans. The new export routes will increase the cost of Russian gas delivered to Europe and therefore will reduce the shareholders' profits. For instance, now it is about twice more expensive to supply Czech Republic via Nord Stream and OPAL, than through Ukraine and Slovakia. It would be a way more expensive to ship gas to Austria by South Stream (there is a ship-or-pay contract of Gazprom with Slovakia through 2029 on top of all other costs).

Gazprom is controlled by the state, so the minority shareholders can expect certain compensations from the state budget. The company may get additional tax benefits and/or direct budget subsidies like those reimbursing the operating losses of Gazprom at the Sakhalin-Khabarovsk-Vladivostok pipeline. Basically, the future subsidies depend on the Russian taxpayers' ability to subsidize their "national treasure" - Gazprom.

Mikhail Korchemkin

East European Gas Analysis

Malvern, PA, USA


April 7, 2013


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Last modified: 12/07/14                    East European Gas Analysis 2006-2014                                           Email:
Reproduction or use of materials is allowed only with reference to East European Gas Analysis or