Gazprom — results of 2018


Priority of the company is expanded reproduction of mineral resources which allows providing production of hydrocarbons in the volumes demanded by the consumer. Since 2005 the level of completion of stocks due to carrying out prospecting works steadily exceeds level of gas production.
As of December 31, 2018 in the territory of Russia reserves of hydrocarbons of Gazprom Group of the categories A+B1+C1 made 35.2 trillion CBM of natural gas, 1.6 billion tons of gas condensate and 2 billion tons of oil. A share of Gazprom Group in reserves of hydrocarbons of the categories A+B1+C1 of the associated organizations and joint ventures (including a share in stocks of joint venture JSC Rusgazalyans) made 1.2 trillion CBM of gas, 110.1 million tons of gas condensate and 592 million tons of oil.
According to DeGolyer and MacNaughton, for December 31, 2018 the proved and probable reserves of hydrocarbons of Gazprom Group on the international PRMS standards made 24.3 trillion CBM of natural gas, 1.1 billion tons of gas condensate and 1.3 billion tons of oil. Audit there passed objects which in total made 93% of reserves of gas, 94.1% of condensate and 93.9% of oil of Gazprom Group of the categories A+B1+C1.
Following the results of the last year in the territory of Russia the gain of reserves of hydrocarbons on the categories A+B1+C1 as a result of carrying out prospecting works made 796.6 billion cubic meters of natural gas, 21,8 million tons of gas condensate and 19.4 million tons of oil. Considerable gain of reserves of gas is received on the Leningrad field on the shelf of the Kara Sea (667.4 billion cubic meters) and Southern Kirinsk on the shelf of the Sea of Okhotsk (100.9 billion cubic meters). In 2018 three fields are open: The Neptune and the Triton on the shelf of the Sea of Okhotsk and Blizhnenovoportovskoye (Yamalo-Nenets Autonomous Area) and also 12 new deposits on fields in the Yamalo-Nenets Autonomous Area, Khanty-Mansi Autonomous Area, Tomsk, Orenburg areas, on the shelf of the Kara Sea.


In 2018 production of natural and associated gas of Gazprom Group reached 498.7 billion cubic meters, having shown growth on 26.6 billion cubic meters in connection with increase in demand. During the autumn and winter period of 2017/2018 the actual maximum daily production made 1.5 billion cubic meters of gas. The essential contribution to increase in production of natural gas was made by Polar and Bovanenkovsky fields. Last year on Bovanenkovo gas field began work the third gas field including installation of preparation of gas with a productivity of 30 billion cubic meters a year. It will allow bringing the Cenomanian — Aptian deposits of a field to design production level — 115 billion cubic meters of gas annually.
Production of gas condensate at the enterprises of Gazprom Group last year made 15.9 million tons. And about results of work of the Gazprom Neft Company read on p. 16.
The Gazprom group is the participant of a number of foreign oil and gas projects. The largest of them on volumes of production of natural gas and gas condensate are projects on development of fields Mok Tin and Hai That in the Vietnamese water area of the South China Sea (share of Gazprom Group in the project — 49%), and also fields of Inkauasi on blocks Ipati and Akio in Bolivia (a share of Gazprom Group — 20%), and on oil production volumes — the project of development of a field of Badra in Iraq (a share of Gazprom Group in the project is 30%).

The Uniform System of Gas Supply and underground gas storages

The Uniform System of Gas Supply of Russia is centralized system on preparation, transportation, and storage of natural gas. The world’s largest system of the main gas pipelines of a high pressure in the territory of the European part of Russia and Western Siberia is a part of the Uniform System of Gas Supply. Also the Group owns the main gas pipelines in the Far East of the country: Sakhalin — Khabarovsk — Vladivostok, Sobolevo — Petropavlovsk-Kamchatsky. Extent of the main gas pipelines and gas pipeline branches of gas transmission societies of Group in the territory of Russia makes 172.6 thousand km. In 2018 in the territory of Russia came to gas transport system of Gazprom 693.1 billion cubic meters of gas that exceeded the level of 2017 on 21 billion cubic meters.
The Gazprom Group operates 23 underground gas storages in 27 geological structures in the territory of Russia. For December 31, 2018 total active capacity on arrangement Russian underground gas storages of the Group reached 75 billion cubic meters. Last year from underground gas storages of Russia 52 billion cubic meters of gas were selected and 49.5 billion cubic meters were downloaded. Maximum daily productivity is recorded on March 1, 2018 and made 555 million cubic meters. Potential maximum daily productivity for the beginning of a season of selection increased in comparison with 2017 on 7.2 million cubic meters and reached 812.5 million cubic meters.
In the territory of the countries of the former Soviet Union Gazprom operates underground gas storages in Belarus (Pribugsky, Osipovichsky and Mozyrsky) and Armenia (Abovyansky station of underground storage of gas), and also uses capacities of Inchukalnsky underground gas storages in Latvia.
For ensuring reliability and flexibility of supply of gas Gazprom actively uses capacities of underground gas storages in the European foreign countries: in Austria (Haidach), Germany (Yemgum, Rehden, Catharina, Ettsel), Serbia (Banatski Dvor), the Netherlands (Bergermeer), the Czech Republic (Damborzhitsa).


The Gazprom group provides reliable and safe operation, exercises corporate control of observance of requirements of industrial safety at operation of gas-distributing systems of Russia.
In property and service of the affiliated and dependent gas-distributing organizations (GRO) of Group in the territory of Russia as of December 31, 2018 there were 786.7 thousand km of networks of gas distribution that makes about 82% of all gas-distributing networks of the Russian regions.
Besides, subsidiaries and the organizations of the Group conduct activity in the field of gas distribution in Armenia (JSC Gazprom Armenia), Kyrgyzstan (OSOO Gazprom Kyrgyzstan), Romania (WIROM GAS S.A.).
One of strategically important areas of work of Gazprom in Russia is implementation of the Program of the gasification having positive impact on social and economic development of regions and a standard of living of people. In 2018 66 regions of the country participated in the Program of gasification.
Within this program in 2018 146 objects 2 thousand km long were constructed. Conditions for gasification of 49.1 thousand households and apartments, 210 boiler rooms in 272 settlements are created. Within technological accession to networks of gas distribution 101.8 thousand capital construction projects are connected.
Level of gasification in 2018 made in general across Russia 68.6%.

Gas motor fuel

Expansion of use of natural gas as motor fuel is one of priority tasks of Gazprom Group. The uniform operator on development of this market is JSC Gazprom Gas Motor Fuel. As of December 31, 2018 in the territory of the Russian Federation 293 automobile gas-filling compressor stations of Gazprom Group with productivity more than 2.2 billion cubic meters a year worked.
Together with Federal Highway Agency the General scheme of placement of objects of gas-filling infrastructure on highways of federal value assuming construction till 2030 of a basic network from 181 objects and creation of so-called gas engine corridors on the key operating and perspective highways of Russia is developed. Last year 21 automobile gas-filling compressor stations were finished by construction and three platforms for the mobile automobile gas refuelers are redeemed from private investors. Besides, reconstruction of four automobile gas-filling compressor stations and two platforms for mobile automobile gas refuelers is carried out. Events for development of infrastructure of providing liquefied natural gas of gas engine locomotives were held.
In a segment of use of natural gas as motor fuel the Gazprom Group is presented in the market of Europe through the 100% the affiliated organization Gazprom NGV Europe (in the markets of Germany, the Czech Republic and Poland), and also through the NIS company (enters into Gazprom Neft Group), which works in Serbia. In 2018 a number of the automobile gas-filling compressor stations and Cryogas stations in the countries of Europe increased to 70 (more than half are located in Germany), the gain occurred due to expansion of a network of the automobile gas-filling compressor stations in the Czech Republic. The volume of realization of compressed natural gas and liquefied natural gas also increased and made 12.9 million cubic meters (in 2017 – 12.3 million cubic meters). The Group realizes gas via automobile gas-filling compressor station and in the countries of the former Soviet Union — Armenia, Belarus and Kyrgyzstan. Last year sales volume made 42.3 million cubic meters.


In 2018 Gazprom Group without raw materials supplied by the customer processed 31.1 billion cubic meters of natural and associated gas that is comparable to the level of 2017. On 5.1%, to 67.4 million tons volumes of processing of liquid hydrocarbon raw materials grew (oil, gas condensate, fuel oil). Last year 3.6 million tons of the liquefied hydrocarbon gases (LHG) and 5.1 million cubic meters of helium were made. Due to increase in volumes of processing of liquid hydrocarbon raw materials production of oil products reached 514 million tons. At capacities of Gazprom Neftekhim Salavat production of monomers and polymers is increased as a result of the carried-out modernization.
Last year volumes of processing of gas of the Karachaganaksky field (Kazakhstan) on the Orenburg gas processing factory are increased to 9.5 billion cubic meters as raw materials supplied by the customer (in 2017 there were 8.8 billion cubic meters).

Power industry

In structure of Gazprom the largest in Russia vertically integrated electrical power holding which merged assets in the sphere of generation of electric and thermal energy, transfer and sale of thermal energy, and also in adjacent segments, is created. The generating assets of Group are consolidated in 100% the subsidiary of JSC Gazprom Energoholding exercising control of the following production companies: PAO TGC-1, PAO Mosenergo, PAO OGK-2 and PAO MOEK. Following the results of 2018 the Group made 151.5 billion kilowatt/hour electric and 131.25 million Gcal of thermal energy. One of the leaders of the Russian sales market of the electric power is JSC Gazprom Power Sale providing more than 95% of volumes of power consumption of the enterprises of Gazprom Group.

The world market

According to the forecasts of the International Power Agency, the world consumption of energy will steadily grow in the long term and by 2035 will increase on 15%. Thus nearly two thirds of a gain will be provided with the countries of the Asian region. Besides, essential rates of increase in consumption of energy will be observed in Africa, in the Middle East and in South America. The need for large volume of energy will turn the Asian region into the largest importer of energy resources in the world: by 2035 the countries of Asia will increase import of oil and coal more than by a third, and natural gas — more than twice in comparison with values of 2018.
Growth of energy consumption will be followed by structural changes in world power balance. Natural gas, being environmentally friendly and economically attractive fuel, actively competes with other fossil power sources — oil and coal.
Till 2035 gas will be the leader in the volume of a universal gain of energy consumption in absolute measures. Increase of attention to environmental issues and need of reduction of level of emissions of CO2 stimulate increase in volumes of consumption of natural gas in the world as most environmentally friendly fossil type of fuel. World consumption of gas will grow on 1.5-2% a year and will exceed the level of 5 trillion CBM that will provide to natural gas about 25% in world fuel and energy balance by 2035.
Due to reduction of own production dependence of the European region on import of gas will grow. In the developing conditions Gazprom is the largest supplier of gas to the European countries — has possibility of strengthening of the positions. After three years of continuous growth consumption of natural gas in Europe last year was reduced on 3.5%, or on 20.1 billion cubic meters, to 548.6 billion cubic meters. The weather factor became the main reason for this decrease. However fundamental factors promoting growth of consumption of gas in last years is development of industrial production and also expansion of use of gas in electricity generation still maintain demand for gas in Europe. In particular, growth of the world prices for the coal observed last year together with price increase of emissions of CO2 promotes strengthening of competitiveness of gas in generation.
Important tendency of the European market is proceeding decrease in own gas production in Europe. Last year it was made a decision on accelerated reduction of production on a field Groningen (the Netherlands). Due to the become frequent earthquakes the Government of the Netherlands already repeatedly limited production on this field, and in March, 2018 made a decision on decrease in volumes of production to 12 billion cubic meters a year by the end of 2022 and its complete cessation by 2030. This decision will significantly affect gas balance of the European region and will lead to replacement of the decreasing gas production volumes with import deliveries. According to consensus forecast on the basis of these energy companies, analytical agencies and foreign political and power departments, the need of Europe for import of gas will increase and by 2035 will grow at a size about 89 billion cubic meters. It speaks about demand of new gas transmission projects of Gazprom — Nord Stream — 2 and Turkish stream.
Last year intensive pumping gas in storages against reduction of internal production (−10.8 billion cubic meters or −4.1%) led to growth of the general import (+14.5 billion cubic meters or +4.7%). Among the largest exporters the greatest growth of deliveries was shown by PAO Gazprom. Export supply of gas to the European foreign countries under contracts of JSC Gazprom Export and under direct contracts of GAZPROM Schweiz AG in 2018 increased in comparison with 2017 on 7.5 billion cubic meters (+3.8%), to 201.9 billion cubic meters. Thus Norway, Great Britain and the Netherlands reduced deliveries to the European market in total on 9.2 billion cubic meters.
Last year volumes of the world liquefied natural gas import for the first time overcame a mark of 300 million tons and reached 319 million tons (on 27 million tons or 9% more than in 2017). The largest center of increase in demand for liquefied natural gas in 2018 were Asia-Pacific countries, thus to a share of China accounted for more than a half of a gain of the world demand. Import of liquefied natural gas to China increased on 15.9 million tons or on 41% and made 54.9 million tons.
China is one of the most dynamically developing gas markets of the world. Growth of rates of consumption of gas considerably advance growth rates of own production in this country and in these conditions Chinese companies are compelled to increase import actively. According to the State Committee of People’s Republic of China on Development and Reform, in 2018 the volume of consumption of gas in the market of China made 280 billion cubic meters that on 18% (more than on 40 billion cubic meters) exceeded an indicator of 2017. Thus last year as, however, and in previous years, rates of increase in volumes of own gas production in China lagged behind growth rates of consumption. In 2018, according to the Public statistical administration of the People’s Republic of China, volumes of own production increased on 8% and made 161 billion cubic meters.
As a result the volume of import of People’s Republic of China gas in 2018 increased to 126 billion cubic meters (a gain over 30 billion cubic meters or more than 30%). It is expected that in the next some years demand for natural gas will continue to grow in China high rates. According to the industry development plan of the gas industry of the People’s Republic of China for 2016-2020 the volume of consumption of natural gas in the market of China in 2020 can reach 360 billion cubic meters. By estimates of the leading supplier of gas on the Chinese market and the key partner of PAO Gazprom in China of the CNPC company, demand for gas in China by 2035 can exceed 600 billion cubic meters, thus about a half of volume of consumption will be provided due to import. The significant role in providing the People’s Republic of China with gas will be played by the Force of Siberia gas pipeline which will start working at the end of this year.


In 2018 the Gazprom Group realized 243.3 billion cubic meters of gas to foreign countries. Sales of gas showed essential growth in Great Britain and the Netherlands. Thus sales volumes to Turkey in connection with influence of a weather factor, growth of supply of liquefied natural gas to this market and deterioration of state of the economy of the country were reduced. Net proceeds from sale (minus excise and the customs duties) made 2.95 trillion rubles. The increase in proceeds from sales is caused by growth of the average price and volume of realization.
Last year volumes of realization of large-capacity liquefied natural gas from a trade portfolio of the Gazprom Group in the foreign markets increased on 16% and made 3.88 million tons or 5.18 billion cubic meters. The companies in Asia-Pacific countries (76% of deliveries) were key buyers. Following the results of 2018 India became the main direction of supply of liquefied natural gas for the first time: a share of this market made 20% (1.01 billion cubic meters).
To the countries of the former Soviet Union Gazprom put 38.1 billion cubic meters of gas, the net proceeds from sale (minus customs duties) made 348.6 billion rubles.

Domestic market

Gazprom is the largest supplier of natural gas in the Russian market. The main buyers of gas of the Group are electric generation companies, population and a municipal complex. Besides, gas of the Group is intensively used by the enterprises of metallurgy, an agrochemical complex, the cement industry and other sectors of economy. In 2018 the Gazprom Group realized to consumers of the Russian Federation 239.7 billion cubic meters of gas that on 9.8 billion cubic meters (for 4,3%) exceeded the level of 2017. Growth of supply of gas was generally noted on the enterprises of power, agrochemistry and a household complex. The net proceeds from sales (minus the VAT) in 2018 made 954.5 billion rubles.