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Gazprom in Internal, External Gas Markets: How to Share Gas "Pie"

  • ID: 4460423
  • Company Profile
  • December 2017
  • 88 pages
  • National Energy Security Fund
  • Gazprom
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The position of Gazprom is quite controversial. On the one hand, after several years of decline in production because of a rise in competition in the domestic market and negative trends in foreign markets, Gazprom is again increasing gas production. It sets record after record in the European market as it meets additional demand.

The attacks of independent producers demanding reform of the industry or at least access to export by pipeline have been repelled once again. The company has got a certain respite.

On the other hand, political resistance to Gazprom in Europe only increases. The final battle for the position in the future European market is beginning.

The opponents are doing all they can to stop or slow down the construction of Nord Stream 2. Neither do the internal gas producers intend to give up. Besides, Gazprom’s financial position has seriously worsened.

All this makes the situation in the gas industry quite intriguing.

In our report you will find answers to the following questions:

 What will happen to the domestic gas market?

  •         The subject of domestic gas market reform remains a dominant one on the fuel and energy sector development agenda. The independents want to get access to the infrastructure and ideally, to have the transport and production divisions spun off from Gazprom. Victory in the 2017 battles does not mean victory in the entire war.
  •         After the presidential election, the independents will inevitably mount a new attack.
  •         What model of the domestic gas market will Russia switch to after all?
  •         The report describes the current market situation; the successes and problems of the independent producers; the fight for regulated prices; and the development of exchange trade.

What awaits Gazprom’s export?

  •         Gazprom has launched grandiose construction. Three new projects at once must be completed by the end of 2019: Nord Stream 2, Turkish Stream, and Power of Siberia.
  •         Gazprom hopes to start gas supply by pipeline to China and keep the current level of export to Europe while changing its logistics. However, these plans have political opponents, and rivals in the same sector.

    Does Gazprom have answers to its worsening financial position?

  •         Major investment projects imply serious expenditure. One also has to take account of the relatively low gas prices in Europe and growth in the state-imposed tax burden. All this requires that the management take active measures to both attract foreign loans and improve spending efficiency.
  •         We will check how the corporation copes with these challenges.

 How has the balance of forces in the corporation’s top management changed and what is to be expected in the near future?

  •         The report describes the fight in the export division and changes in the procurement system.
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Chapter 1. Staff Reshuffles, Management Reorganisation in Gazprom    
1.1 Transformation of the export division    
1.2 Engineering and the fight for procurement    
1.3 The Board of Directors and top management    

Chapter 2. Gazprom in Domestic Gas Market    
2.1 Demand and pricing    
2.2 A pilot project to liberalise prices    
2.3 Exchange trade in gas: a one-person show    
2.4 The fight for regulated prices    
2.5 Development of gas supply and autogas    

Chapter 3. External Markets: Time of Records, Decisive Battles for Transit    
3.1 Gazprom in the European Union markets: towards new records    
3.2 Gazprom in the Turkish market: leave to stay    
3.3 Key gas transport projects    
3.4 Gazprom in the former Soviet Union    
3.5 The European Commission’s antimonopoly investigation    
3.6 The fight for the liberalisation of gas export from Russia by pipeline    

Chapter 4. Gazprom in the East: China Nearer and Nearer    
4.1 An assessment of the Chinese market    
4.2 Development of resources in Eastern Siberia and Yakutia and Power of Siberia-1    
4.3 Amur Gas Processing Plant    
4.4 Power of Siberia-2 and gas supply to China from Sakhalin    
4.5 Expansion of Sakhalin-2 vs Far Eastern LNG    
4.6 Pipeline Gas Supply to India, Japan, and South Korea    

Chapter 5. Gazprom’s financial position: how to make both ends meet    
5.1 Incomes lagging behind expenses    
5.2 Gazprom’s capital investment and investment programme for 2016 and 2017    
5.3 Dividend policy: a balance between the appetite of the government, the interests of investors, and growing investment    
5.4 Tax pressure continues    
5.5 Gearing rises but remains reasonable    

Chapter 6. A medium-term forecast

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All materials and sources used for issuing each report are thoroughly verified and analyzed by experts. The information is based on industry statistics, data of oil and gas companies, information of federal and regional mass-media, materials of conferences and round tables.

The analyst has pored on the following goals:

  • Analyses of oil & gas and power industries, political risks within the energy sector, geopolitical problems in connection with the production of hydrocarbons and their supply to the global market, strategic development of companies, new production and transportation projects
  • Consulting on the influence of political factors on the oil & gas business, decision-making within Russian energy companies and government bodies dealing with the energy industry
  • Development of energy business concepts in Russia
  • PR services for oil & gas corporations
  • Analysis of images and reputations of energy corporations