Last year increase in demand in foreign markets allowed Gazprom increasing significantly operational performance. This year positive tendencies proceeded.


Gazprom keeps the leading positions among the Russian and foreign public companies in size of stocks and volume of gas production. A share of the Group in the world reserves makes 17%, Russian — 72%, a share in the world production — 11%, Russian — 66%. As of December 31, 2016 in the territory of Russia reserves of hydrocarbons of Gazprom Group of the categories A+B1+C1 made 36.4 trillion CBM of natural gas, 1.5 billion tons of gas condensate and 2.1 billion tons of oil. Following the results of last year in the territory of Russia the gain of reserves of hydrocarbons as a result of exploration works made 457.4 billion cubic meters of natural gas, 38 million tons of gas condensate and 19.3 million tons of oil.

According to DeGolyer and MacNaughton, the proved and probable reserves of hydrocarbons of Gazprom Group on the international PRMS standards made 23.9 trillion CBM of natural gas, 1.02 billion tons of gas condensate and 1.4 billion tons of oil. Audit there passed objects which stocks in total made 95.4% of reserves of gas, 93.5% of condensate and 93.3% of oil of Gazprom Group of the categories A+B1+C1. The proved and probable reserves of hydrocarbons of Gazprom Group on the PRMS standards increased in comparison with previous year on 1.8 billion barrels.


In 2016 the volume of gas production of Gazprom Group made 419.1 billion cubic meters that is higher than the indicators of 2015 on 0.6 billion cubic meters. Capacities of Gazprom Group are capable to provide production in volume more than on 150 billion cubic meters a year exceeding the actual production. It allows corporation increasing quickly gas supply within the country and out of its limits during winter maxima of consumption.

In January — May, 2017 the Gazprom Group extracted 198.5 billion cubic meters of gas that is on 27 billion cubic meters or on 15.7% more than for the same period of last year. Oil production last year made 39.3 million tons (on 3.3 million tons more than in 2015), including on Gazprom Neft Group – 37.7 million tons. Production of gas condensate on Gazprom Group made 15.9 million tons (growth on 0.6 million tons). Taking into account a share of Group in volumes of production of the companies investments in which are classified as joint operations (1 billion cubic meters of gas and 7.9 million tons of oil), production of hydrocarbons by Gazprom Group made 420.1 billion cubic meters of gas, 15.9 million tons of gas condensate and 47.2 million tons of oil.

Domestic market
In 2016 consumption of natural gas in Russia made 456.7 billion cubic meters that is on 2.8% more than the level of 2015. Growth of consumption was caused by generally colder weather conditions in the fourth quarter. The volume of realization of natural gas by Gazprom Group last year in domestic market made 214.9 billion cubic meters (without intra group deliveries) that is on 2.8% less than in 2015. The established regulatory conditions still promote high competitiveness of other producers of gas who have more flexible opportunities for work with buyers.

Gazprom increases realization of gas on St. Petersburg International Commodity Exchange (St. Petersburg International Commodity Exchange) for development of the Russian gas market. In 2016 Gazprom realized on this platform 10.7 billion cubic meters of gas (in 2015 – 4.3 billion cubic meters), a share of the company in total sales on St. Petersburg International Commodity Exchange made 64%. Consumers show considerable interest in the auction on St. Petersburg International Commodity Exchange: last year gas of Gazprom was delivered to 45 regions of the country (in 2015 — to 39 regions). The Gazprom Mezhregiongaz Group realized 246.3 billion cubic meters of gas from resources of Gazprom and other producers (including the auction on St. Petersburg International Commodity Exchange) in 2016.

The market of gas in Russia exists in the conditions of two various approaches to determination of the prices for suppliers that causes existence of two sectors of realization of gas. Sale of gas by PAO Gazprom is generally carried out at the prices which are in a directive way established by the state. Realization of the gas extracted by the independent gas and oil companies is carried out at the prices established by agreement of the parties. The main independent suppliers of gas are PAO Novatek and PAO group of companies Rosneft.

Gas motor fuel

In 2016 the total amount of realization of the compressed natural gas (CNG) from automobile gas-filling compressor stations (CNG filling station) of Gazprom Group and JSC Gazprom Gas Motor Fuel in the territory of Russia made 480 million cubic meters (in 2015 – 435.9 million cubic meters). In the territory of the Russian Federation as of December 31, 2016 more than 320 CNG filling stations operated, thereof 254 belonged to Gazprom Group and JSC Gazprom Gas Motor Fuel. Last year the Gazprom Group in 21 regions of Russia put into operation of 35 new CNG filling stations.

Consumption of natural gas as motor fuel in Russia last year increased on 18%. Target segments of consumption of compressed natural gas in Russia, as well as in the world practice, are passenger motor transport, road and municipal equipment, cargo city transport, easy commercial transport. The potential volume of demand for compressed natural gas by 2020 in the Russian Federation is estimated at 1 billion cubic meters annually.

In Europe the Gazprom Group realizes gas motor fuel through the absolutely Gazprom NGV Europe GmbH subsidiary (Germany, the Czech Republic, Poland), and also through the NIS company entering into Gazprom Neft Group which sells compressed natural gas in the market of Serbia. In 2016 the number of the CNG filling station of Group in the countries of Europe increased to 60. In Poland two stationary cryogas stations also function. Besides, seven CNG filling stations in the Czech Republic belong to the associated Vemex Company.


Last year became record on volumes of supply of gas y PAO Gazprom under the contracts of JSC Gazprom Export and Gazprom Schweiz AG to Europe. Following the results of 2016 this indicator increased on 19.9 billion cubic meters (12.5%) and reached a point of 179.3 billion cubic meters. As a result a share of deliveries of Gazprom in gas consumption by the European foreign countries (including Turkey) reached 33.1%.

The climatic factor, falling of own production in Europe and price competitiveness became the most important reasons of growth of supply of the Russian gas. According to the IHS Company, the largest sectors of economy consuming natural gas in Europe are household sector from shares of 39%, electricity generation and heating — 30%, industry — 27%. Consumption of gas in the European countries in 2016 made 541.7 billion cubic meters that on 35.1 billion cubic meters or 6.9% more than in 2015. Growth of consumption of gas in electricity generation as a result of reduction of prices of gas and increases of its competitiveness concerning coal and also the suspension of operation of several nuclear power plants in France at the end of 2016 for inspection of their work which coincided on time with abnormally low winter temperatures had the most significant impact on level of demand.

Own gas production in the European countries last year was reduced on 2.2 billion cubic meters, having made 261.9 billion cubic meters. Import of gas on the European market in 2016 increased on 37.3 billion cubic meters or 15.4%. Import of liquefied natural gas to Europe, despite forecasts of its essential growth, in 2016 was reduced on 1.1 billion cubic meters, to 55.5 billion cubic meters that is explained by reorientation of supply of liquefied natural gas to more bonus markets.

Within last year quotations of the European trading floors raised, showing high correlation with the prices attached to an oil-product basket. The price of the gas delivered under long-term contracts of PAO Gazprom included services in its delivery to the buyer according to daily demands. The price of gas contract includes a bonus for reliability and flexibility of deliveries in comparison with the price of the gas realized on trading floors which is delivered by equal parts during all period of validity of the contract.

In the current year Gazprom continued increasing export deliveries. The volume of export to foreign countries for the first five months of 2017 for 13.3% exceeded an indicator of last year. In absolute figures the increase made 9.5 billion cubic meters, 81.2 billion cubic meters of gas are delivered to consumers. In particular, deliveries to Northwest and Central Europe considerably grew. For example, to Germany — on 15.6%, Denmark — on 13.6%, Austria — on 79.5%, Czech Republic — on 14.5%, Slovakia — on 21.7%.

Essential growth of import of the Russian gas was shown also Turkey (on 22.6%) and the countries of the Southern and Southeast Europe, including Bulgaria — on 14.5%, Greece — on 8.6%, Hungary — on 37.3%, Serbia — on 42.2%.

In 2016 the volume of world trade of liquefied natural gas increased on 13.7 million tons or 5.5% and made 264 million tons, having shown the most significant growth since 2011. Pacific Rim, first of all China (+6.4 million tons), India (+3.6 million tons) and Pakistan (+1.7 million tons) became the main center of increase in demand for liquefied natural gas in 2016. Besides, the noticeable growth of volume of import deliveries was observed in the countries of the Middle East (+2.5 million tons) and North Africa (for example, in Egypt +4.1 million tons). The list of the countries — importers of liquefied natural gas was filled up by Colombia and Jamaica.

The Gazprom group last year increased supply of liquefied natural gas on 4.1%, to 3.71 million tons (4.94 billion cubic meters). The key direction of supply of liquefied natural gas from a trade portfolio of Gazprom Group was a market of Japan — about 45% of all volume of the realized liquefied natural gas was a share of it. Supply of liquefied natural gas to Taiwan considerably grew. Also for the first time for long time supply of liquefied natural gas to Mexico and the United Arab Emirates was carried out again.

Alexey Miller, Chairman of the Board of PAO Gazprom: «Now the Asian gas market is the most fast-growing market in the world. Undoubtedly, here it is necessary to allocate the Indian market. But the market No. 1 is Chinese. Consumption of gas in China in 2016 increased on 7% and made 205.8 billion cubic meters. In the same way, as well as in Europe, own production in China does not cover increase in demand. Import of gas on the Chinese market in 2016 increased on 22%. Thus import volumes are in China approximately in the ratio 50 on 50: somewhere 50% is pipeline gas and 50 is liquefied natural gas. And here it should be noted that in winter China covered the peak demand first of all at the expense of additional volumes of liquefied natural gas. And it for the present distinguishes the Chinese market from European where peak demand for gas becomes covered due to pipeline deliveries in winter. The reason here is one: supply of pipeline gas from Central Asia does not provide those peak volumes of demand which are characteristic for the markets of consumption and therefore the Chinese market for the present covers peak demands due to additional supply of liquefied natural gas.

The contract for delivery of the Russian gas to China by Gazprom on 38 billion cubic meters a year will significantly change these ratios on the volume of pipeline deliveries to volumes of supply of liquefied natural gas. But the most important here is that the leadership of China consistently pursues policy on increase in volumes of gas in power balance of the country. Now gas in energy balance of China makes only 6%. But in the current five-year period reference points of an exit to a percentage ratio of a gas component in power balance from 8.3% to 10% is put. It is absolutely clear that in the nearest future volumes of consumption of gas in China will come to the level of 300 billion cubic meters of gas and more.

I with great pleasure want to note that for the very short period Gazprom and our main Chinese partner CNPC Company have very friendly, constructive business relationship. We signed Agreement on strategic partnership with CNPC. Of course, the basic project for us is the gas pipeline Force of Siberia, «east» route of supply of gas to China. But we continue negotiations on increase in volumes of supply of gas with our Chinese colleagues. In particular, there is an arrangement that we will expand cooperation on «east» route. We with our partners from CNPC started commercial negotiations on supply of pipeline gas from regions of the Far East. Thus we plan to reach the main terms of delivery of gas from the Far East until the end of 2017.

During the last time we came to absolutely specific, subject projects in other areas of cooperation. First of all this is underground storage of gas. Recently in China we signed three contracts for joint implementation of projects on gas storage. Besides, we signed the agreement on joint implementation of the project in the field of gas generation. It is power plant of Xinyuan design capacity 900 MW. We signed the cooperation agreement in the area of gas motor fuel. Specifically it concerns the construction project of the highway Europe — the Western China».


It is expected that the world consumption of energy by 2035 will grow on 25%. Thus nearly two thirds of a gain will be provided with the countries of the Asian region. Besides, essential growth rates of consumption of energy will be observed in Africa, in the Middle East and in South America. The largest region — the exporter of energy resources will be countries of the former USSR. The total volume of export of energy resources from the countries of the region by 2035 will increase almost on 50%, first of all at the expense of increase in supply of natural gas. The largest importer of energy resources in the world will be countries of Asia: by 2035 the region will increase import of oil on 30%, coal — more than on 40% and natural gas — more than in 2.5 times.