Alexey Miller holds conference call marking Oil and Gas Industry Workers Day
, Chairman of the Gazprom Management Committee, today held a conference call marking Oil and Gas Industry Workers Day.
The heads of Gazprom Dobycha Noyabrsk, Gazprom Dobycha Shelf Yuzhno-Sakhalinsk, Gazprom Transgaz Saint Petersburg, Gazprom Transgaz Moscow, , and Gazstroyprom made operational performance reports at the meeting.
Shorthand record of Alexey Miller's speech
Esteemed colleagues, dear friends,
We are now starting our celebratory conference call. With all my heart, I wish you all a happy professional holiday in connection with the upcoming Oil and Gas Industry Workers Day!
This year, the holiday is taking place amid vast changes in the gas markets. In fact, the entire global energy system is changing dramatically.
As we have noted many times, these changes are rooted in erroneous — indeed, fundamentally erroneous — decisions of foreign, i.e. Western, regulators and the sanctions policy.
I am referring primarily to the fact that our traditional partners are starting to move away from conventional energy sources and the system of long-term contracts for gas supplies in the markets. As a result, this undermines the reliability and stability of gas supplies.
Please note that all these erroneous decisions were made under the tremendous pressure of those who support the so-called “accelerated decarbonization.”
What do we see today? What we see is a “price rally” in a literal sense. A price rally at gas trading platforms and gas hubs. The price of gas regularly goes above USD 3,000 per 1,000 cubic meters. Here at Gazprom, we made price forecasts for the coming winter. According to the conservative estimate, if the current trends that exist in the market today continue in the future, the price might exceed USD 4,000 per 1,000 cubic meters at the peak of the autumn/winter period.
In recent days, the Asian seasonal factor has also been a contributor to the struggle over LNG with the market. There is no doubt that the Asian seasonal factor is affecting the pricing trend.
The environmental agenda of the European Union that we heard so much about over the past years is now basically in the dustbin of history.
We see sharp spikes in the consumption of coal and fuel oil across Europe. Also of note is the feverish demand for firewood. Everyone is stocking up on firewood. Nobody thinks about the environmental agenda anymore. Everyone is concerned with surviving the winter.
We see that the energy policy adopted by the foreign regulators has led to a reduction in global gas demand. Over the eight months of this year, global gas demand declined by 40 billion cubic meters. Let us look at where the decline took place. A reduction of 29, or nearly 30, billion cubic meters of gas took place in the 27 countries of the European Union. This makes up 73 per cent of the reduction in global demand. Or 85 per cent if we count the United Kingdom.
In parallel to our work in the , we are consistently stepping up our supplies to via the gas pipeline. This year, we broke the record for daily gas supplies several times in excess of our obligations on daily contractual volumes. The growth in gas supplies to the Chinese market went up by 60 per cent over the eight months of 2022 compared to 2021.
According to current data, Gazprom has already produced 288.1 billion cubic meters of gas. A total of 154.7 billion cubic meters has been delivered to the domestic market, while 82.2 billion cubic meters went to the countries beyond the FSU.
I would like to stress that, despite reduced gas exports to foreign markets, such as countries beyond the FSU, our calculations clearly show that the financial results of Gazprom and our revenue for 2022 will be substantially higher than those achieved in 2021.
As you know, the met yesterday and resolved to hold an so as to consider paying out interim for 2022.
Since the results for the first half of the year are overwhelmingly good, the dividends will be record-high. Naturally, this financial result means that we have a secure cash flow for implementing our strategic investment projects.
Socially-oriented projects have priority in this regard. I am talking about the program for gas supply and in Russian regions, which we are expanding in 2022 jointly with regional administrations as the financial potential of Gazprom grows. We are adding numerous facilities to the programs for gas supply and gas infrastructure expansion in the constituent entities of the Russian Federation. We are signing programs with new regions. This way, we are expanding the reach of the program.
In this connection, I would like to mention our work on additional gas grid expansion. We carry out these activities at a vigorous pace, and our gas distribution entities completed 65 per cent more works in August versus July. That is, not only have we achieved a good pace, but we keep accelerating it.
I am convinced that all of the goals and objectives set under the additional gas grid expansion program and the program for the expansion of the gas supply and gas infrastructure network in Russian regions through the end of 2025 will be achieved. The same is true for the goals the deadline for which is 2030.
Our consumers, citizens of Russia, will gain access to a cheap and reliable source of energy. It is especially important to note that domestic consumers have perfect reasons to be optimistic about the country's gas future. Why? Because we have enough reserves for 100 years ahead. And we know that some of our fields will, according to their development projects, remain in operation and provide the country with gas beyond 2120.
It became possible above all because we have created and are now developing a new gas production center in . We are preparing the launch of the field and beginning the pre-development of the deep-lying deposits of the field. And, as is customary at Gazprom, we are setting up corresponding gas transmission facilities in parallel with the new production facilities.
There is no doubt that consumers in the east of Russia ought to have the same access to gas as our consumers in European Russia. In this regard, we have already laid so much groundwork for the construction and shaping of a gas transmission system in Russia's , in Eastern Siberia. This groundwork makes it possible for us to substantively and precisely set the objective that we are going to pursue in the nearest future — to connect Russia's in the European part of the country with the gas transmission system that has been created in the east.
As for the current status of the eastern projects, it is of course worth noting that we continue the work on the Power of Siberia gas pipeline. Before the end of the year, we will celebrate a very important and significant event — the start of gas supplies from the field into Power of Siberia. The construction of the linear section between the Kovyktinskoye and Chayandinskoye is already in its final stage. And, without any doubt, we will comply with all of the contractual obligations we have assumed for 2023 to our domestic consumers, as well as to our Chinese partners regarding the increase of gas supplies to China.
Of course, the Eastern Gas Program is to a large extent designed to expand our export possibilities and supply gas to China. We know that the Chinese market is the world's most dynamic one, and the growth in China's gas consumption over the next 20 years is projected to make up 40 per cent of global gas consumption growth. That is why we signed another contract for gas supplies to China. I am referring to the Far Eastern route. We are already starting to develop the design & cost estimate documentation for the project.
And, of course, I must mention the Soyuz Vostok project, i.e. the gas trunkline that will run across Mongolia and become an extension of the Power of Siberia 2 gas pipeline.
Esteemed colleagues,
As of now, is gaining importance as a line of our work and our core activities. We are implementing two projects of an immense scale in this sector, namely, the and the plant in the town of Svobodny. The , as you know, is being built in compliance with the set deadlines, and its construction readiness is currently at 86 per cent. We are also upgrading the processing facilities in other regions of Russia.
Esteemed colleagues,
Our professional holiday is another good reason to remember that the autumn/winter period is approaching. As we understand, this objectively means higher loads. I am perfectly sure that Gazprom will, as always, demonstrate perfect performance in the upcoming autumn/winter period. I have no doubt about that.
We are stockpiling record-high working gas inventories for this winter, and this task is currently 92 per cent completed. By the start of the period of withdrawal of gas from underground gas storage facilities, we will have hit another record in potential daily withdrawal of gas from the underground storages.
Esteemed colleagues,
I am convinced that we are going to reach every objective set for the Gazprom Group. I am convinced that all of our goals will be met.
The key to our successful performance lies in our experience, our knowledge, and our understanding of our goals and objectives. Of course, our numerous tight-knit and well-coordinated teams are crucial as well. I would like to thank each and every one of you for your commitment and dedication that is evident in your work.
Dear friends, esteemed colleagues,
I would like to conclude my speech by wishing you further success.
Take care of your health. Make sure your families and loved ones are healthy. Speaking to managers: make sure your teams are healthy, too.
May you all be happy. May you find happiness in your work and in your family life. I wish you well-being and all the best.
Dear friends,
We can look into the future with confidence. I wish all of you a happy professional holiday.
And, as we say at Gazprom, let us go on with our work.
Thank you!