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

Vladimir Putin reduces future revenues of Gazprom

At the St Petersburg International Economic Forum, President Vladimir Putin announced a change in monopoly tariffs' regulations that may seriously affect the future revenues of Gazprom.

"I want to inform you of a decision we’ve taken: the growth of regulated tariffs of infrastructure monopolies will be limited, and should not be higher than the actual inflation rate of the past year," Putin said.

All investors evaluate Gazprom assuming guaranteed growth of the domestic price of gas at about 15% a year. According to the governmental decree, the growth was supposed to continue until a profit parity of domestic and export sales of Gazprom was reached. Investors may need to change their cash-flow models of Gazprom now.

For a partial compensation of future losses, the Federal Tariff Service suggested an additional 3% increase of the wholesale price of gas for Russian consumers on August 1, 2013. A regular 15% raise will take place on July 1.

Russian gas giant has launched several very expensive pipeline projects that result in a rapid growth of gas transportation costs. Combination of a guaranteed growth of costs and uncertain revenues is likely to disappoint investors.

Mikhail Korchemkin

East European Gas Analysis

Malvern, PA, USA


June 23, 2013


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