Russia's Gazprom cuts investment budget for 2025, China remains focus

Russia's Gazprom on Nov. 28 set its draft investment budget for 2025 at some Rb1.52 trillion ($14 billion), a reduction of some 7% compared with this year's planned spending.

In a statement, Gazprom said next year's investment budget would provide funds for financing priority projects, including the expansion of the Power of Siberia gas pipeline.

Funds would also be used for the further development of gas production centers in eastern Russia and on the Yamal Peninsula, as well as the continued gasification of Russian regions.

"The approved financial plan will ensure that Gazprom's liabilities are covered without a deficit, in full," it said.

"Decisions on attracting borrowed funds are planned to be made based on market conditions, liquidity and Gazprom's need for financing."

Gazprom's final budget for this year was set at Rb1.64 trillion, which was increased from Rb1.57 trillion laid out in the initial plan from December 2023.

China focus

China is now Gazprom's biggest gas export market with deliveries to CNPC via the Power of Siberia link set to reach some 30 Bcm in 2024 before hitting design capacity of 38 Bcm/year in 2025.

With a focus on China, Gazprom is also implementing new gas supply projects.

At the end of January 2027, gas will also go to China via the Far Eastern route, which is set to have a capacity of some 10 Bcm/year, bringing Russia's total to 48 Bcm/year.

On top of this, Gazprom also plans to deliver 50 Bcm/year of gas through the Power of Siberia 2 route via Mongolia, though supply terms have yet to be agreed between Moscow and Beijing.

Gazprom also said Oct. 29 it expected sales revenues in 2024 of Rb7.9 trillion, 6% higher than forecast.

"The increase in gas supplies both to the domestic market and to key export destinations contributes to the growth of the budget revenue," Sadygov said.

Revenue was also boosted by an improved pricing environment in the second half of the year, it said.

European gas prices hit fresh 2024 highs in November. Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at Eur48.58/MWh on Nov. 21 -- the highest assessment since November 2023.