On February 17, 1993 the state gas concern Gazprom was transformed to the Russian joint-stock company of the same name. Since then the company not only successfully strengthens, but also increases its potential — improves key activities, diversifies core business, expands geography of presence and increases production efficiency.

Thanks to accurate vertical integration and well thought over long-term strategy in three decades Gazprom turned into one of the most powerful world power corporations.

As the history of the Soviet gas industry and the Russian Group Gazprom visually testifies — world crises inevitably come and leave, but they are not capable to stop development and only even more urge on progress. Let’s remind that the most actively domestic gas industry began to develop not in the simplest times.

So, in 1898 rather safe Russian Empire came out on top in the world on oil production, having overtaken on this indicator of the USA, and for 1901 inclusive held a palm here. Thus it is important to note that practically nobody in Russia seriously reflects on possibility of gas industry development even if to mean a method of dry distillation of coal for production of the artificial gas called illuminating or the associated oil gas (AOG) applied locally in oil-extracting regions to domestic needs and in the industry. But the economic crisis which captured all civilized world in 1899-1903, to put it mildly, brought this world out of a comfort zone. And the Russian Empire here did not become an exception at all. Meanwhile violation of relative economic balance «convenient» until then because of external factors promoted acceleration of rates of modernization of all domestic industry and its modernization. At the same time besides traditional fossil power sources which at that time were mainly a coal and oil, in Russia began to show more consideration for other potential energy resources. For example, in 1911 the first Russian company on production and use of natural gas The Stavropol Association for Research and Operation of a Subsoil of the Earth was created. Unfortunately, no power breaks happened.

Actually the gas industry in our country started being formed only in Soviet period. And to it, we will remind, preceded and World War I (1914-1918), Great Russian revolution of 1917, Civil war in Russia (1917-1923), the Great depression (1929-1939), and also the Great Patriotic War of the USSR against Nazi Germany and its European allies accompanied (1941-1945). In addition, it is necessary to understand that the tasks set by the five-year plan (1946-1950) restorations and developments of a national economy of the Soviet Union after the termination of the Great Patriotic War, actually were solved only in 15 years — by the beginning of the 1960s. And they were solved against global geopolitical, military, economic and global ideological opposition between the USSR and the USA which lasted from 1946 and up to the end of the 1980s and ended with disintegration of the Soviet Union in 1991. Meanwhile even in such difficult conditions the most powerful gas industry in the world was created in our country.

Undervaluation

Initially value of natural gas in the Soviet Union was strongly underestimated. Respectively, purposeful searches of deposits of methane were not practically conducted in our country. Besides, responsibility for development of the gas direction and separate components constantly passed from one ministry or department to another one — Helium committee, Vsekhimprom, Narkomtyazhprom, Narkomtop, Narkomneftepry and so on that, in general, did not accelerate development of the gas industry. As result — production and use of natural gas in the USSR quite long time remained at minimum possible level.

So, in early twenties only five natural gas fields which total stocks were estimated within 0,2 billion cubic meters were known in the Soviet Union, and annual production of natural gas in the country did not exceed 15 million cubic meters. In 1924 the Helium committee was created which promoted the beginning of systematic searches of gas fields thanks to what production of natural gas in the USSR progressively increased and by the beginning of the 1930s exceeded 0.3 billion cubic meters a year.

The first All-Union gas conference on use of natural gases which defined the directions of formation of bases of strategy of the Soviet gas industry was called in Moscow in 1930 by Committee on chemicalization at the Supreme Council of National Economy of the USSR (SCNE). Responsible for performance of the tasks set at conference became subordinated SCNE All-union association of chemical industry (Vsekhimprom) and the state trust on use of natural gases of Soyuzgaz.

In 1933 at the National Commissariat of the Heavy Industry of the USSR Management of the gas industry and the industry of artificial liquid fuel was created. It was engaged in embodiment in life of the resolution of Council of People’s Commissars on Gasification of Motor Transport and Use of Gas as Motor Fuel in the Soviet Union and also development of the direction in design, construction and operation of «distant» gas pipelines.

At the beginning of the 1939s responsibility for the gas direction passed to the National Commissariat of Fuel Industry, however the same year Narkomtop of the USSR was divided into Narcomats of Oil (Narkomnefteprom) and Coal industry. Since that moment the gas industry came under the guidance of Narkomnefteprom. At that time the Soviet Union was engaged in development of the master plan of gasification of the largest cities, tests of gas cylinder cars on the compressed and liquefied gas and also construction of the USSR’s first automobile gas-filling stations. In some regions of the country gas exploration was conducted. And in the 1940s nearly 3.4 billion cubic meters of gas were made in the Soviet Union, however, thereof only 376 million cubic meters were natural.

Impulse for development

However, the gas direction in the USSR received really powerful impulse for development in the period of the Great Patriotic War. The country passed to military regime within which it was extremely necessary to provide uninterrupted supply of military industrial complex with fuel and energy. It was not so simple to make it by means of the railroads in the conditions of war. Therefore decisions on the accelerated development of the deposits of natural gas opened near Saratov even before the war and construction of gas pipelines for deliveries of the got raw materials to the industrial enterprises were made.

The first operational well was put on the Elshansky field in October, 1941. And already in the 1942 the 16-kilometer gas pipeline of Elshank — the Saratov state district power station was put in operation. And in January, 1943 Elshansky gas arrived on the Saratov combined heat and power plant, having become the main source of energy for work of the enterprises and plants including evacuated to the region from the western areas of the USSR. Natural gas was received by both housing-and-municipal sector and the population — in the spring of the same year there was the first gas stove for domestic needs in Saratov. And in September already 160-kilometer gas pipeline Buguruslan — Pokhvistnevo — Kuibyshev was put into operation (today — Samara).

The same year near the settlement of Kurdyum of Kuibyshev area (nowadays Saratov) a new gas deposit was discovered. Thanks to what the Elshansky field was renamed into Elshano-Kurdyumskoye. Then by order of Glavgaztopprom All-Union prospecting trust was organized on searches and investigation of natural gas fields of Soyuzgazrazvedk. And already in 1944 it was made a decision on construction of the gas pipeline Saratov — Moscow 843 km long which was complete on July 11, 1946. By the way, many experts consider this date as birthday of the Soviet and Russian gas industry that is quite reasonable as just from now its active development began in the USSR.

From 1944 to 1949 intensive development of gas fields of Krasnodar Krai, Komi and Lower Volga area began in the Soviet Union. Design, construction and operation of gas transmission capacities and systems of gas supply. Gasification of cities, enterprises and transport gained steam. Work on creation of gas-processing plants began in the country.

Prototype

In the 1950s development of gas fields to Stavropol Territory and in the Astrakhan region began, the foundation of development of resources of the West Siberian oil-and-gas province was laid, there was exploration in Yakutia. The central system of the main gas pipelines was created, three strings of gas-main Stavropol — Moscow 1255 km long were put into operation, on the gas pipeline Serpukhov — Leningrad (803 km) natural gas began to come to the Northern capital of the USSR. Active creation of system of underground storage of natural gas began (including near Moscow and Leningrad), the country’s first underground gas storage in water-bearing structures — the Kaluga UGS was put into commercial operation.

Creation in 1956 of the Head department of the gas industry subordinated directly to Council of ministers of the Soviet Union also became the extremely important event. Actually the Glavgaz became a prototype of the independent ministry that, certainly, affected further development of domestic gas industry very positively. By the way, already in 1958 Central Committee of CPSU and Council of Ministers of the USSR set the task to bring gas production in the country in the next 15 years to 270-320 billion cubic meters a year for Glavgaz that at 13-15 times exceeded volumes of its production in 1957. At the same time the Glavgaz was entrusted to construct in 1959-1965 26 thousand km of the main gas pipelines and gas pipeline branches (for comparison: in 1956 the extent of all Soviet gas highways made about 7 thousand km).

Transformation

The next decade was even more significant for development of the Soviet gas industry first of all because large, huge and even super huge deposits of hydrocarbons were found in Russia. So, a number of fields were open in the Yamalo-Nenets Autonomous Area (YNAA), including — Gubkinsky, Tazovsky, Polar, Vyngapurovsky, Yamburg, Komsomol, Medvezhye, Yuileynoye, Urengoy and Novoportovsky, in the Nenets Autonomous Area — Vasilkovskoye. Orenburg oil and gas field is revealed. In the Irkutsk region — the Markov oil and gas field that marked opening of the new oil-and-gas province in Eastern Siberia.

In addition, the Vuktylsky field in Komi was put in industrial operation — Sovkhoznoye in Orenburg region was put into trial operation. Development of Berezovsky oil and gas field started in Khanty-Mansi Autonomous Area (KMAA). The accelerated arrangement of Medvezhye oil and gas field and building of city Nadym began. The gas-main Nadym — Ukhta — Torzhok is put into operation, laying of the gas pipeline Vuktyl — Ukhta I began (Shine of the North) — the first stage of the transcontinental gas transmission system the North of Tyumen region — the Center. Also active work on development of export supply of the Soviet pipeline gas to Eastern and Western Europe started in the 1960s. Besides, scales of expansion of branch demanded creation of Interconnected dispatching office (subsequently — Central operations and dispatch department).

Transformation of Glavgaz in the State production committee on the gas industry and then and in the Ministry of the gas industry of the USSR (Mingazprom) became one more important fulfillment. On it perturbations of organizational structure of branch management stopped more than for two decades that besides extremely positively affected further development of the Soviet gas industry.

Growth and increase

The 1970s became the period of prompt growth of authority of domestic gas industry on the Soviet Union and significant increase in influence of the USSR on the world scene. The annual volume of production of the Soviet natural gas grew in a decade from 198 billion cubic meters in the 1970s to 435.2 billion in 1980. At the same time the total length of system of the main gas pipelines in the Soviet Union grew from 67.5 thousand to 131.6 thousand km. Medvezhye oil and gas field is entered into industrial development. The gas pipeline Northern regions of Tyumen region — the Urals — Volga region — the Center (Nadym — the Urals — the Center) 3600 km long became operational. On Yamal are open Bovanenkovsky, Harasaveysky, Kruzenshternsky and Yuzhno- Tambeysky fields. At Mingazprom the Head Department on Investigation and Development of Sea Oil Fields and Gas is created — preparation for geological exploration of perspective oil and gas sites of the shelf of the Caspian, Okhotsky, Barents, Baltic and Karsky seas began.

All-union association is created in system of the Ministry of Foreign Trade of the USSR the Soyuzgazeksport. Contracts for export of the Soviet gas to a number of the countries of Western and Eastern Europe are signed; deliveries went to some of them at once. Construction of the main gas pipeline Union is begun (Orenburg — the Western border of the USSR). The Soviet experts began participating in oil and gas projects abroad.

Ambiguous eighties

The 1980s were very ambiguous for domestic gas industry. It is obvious that the cardinal changes which began in the Soviet Union by the end of decade negatively affected the gas industry as well. But everything began not so bad and did not foretell any serious problems at first. So, production of natural gas in the country progressively increased up to 1988 when that indicator reached 770 billion cubic meters a year. However next year the tendency of continuous forward increase in production interrupted — production of natural gas fell to 589 billion cubic meters, having rolled away to the level of 1984.

Thus in ten years were open the North Tambeysky field on Yamal, unique Kovykta and Shtokman — respectively in the Irkutsk region and in the Barents Sea, Prirazlomnoye — on the shelf of the Pechora Sea. Impressive resources of hydrocarbons were found in the Sea of Okhotsk. Yamburg gas field was put into operation. Gas pipelines Urengoy — the Center I, Urengoy — the Center II and Urengoy — Uzhgorod were put in operation. Construction of gas pipelines Yamburg — Yelets I, Yamburg — Yelets II and Progress was begun and completed (Yamburg — the Western border of the USSR 4366 km long). The first main gas pipeline in the Far East of Okh — Komsomolsk-on-Amur was constructed.

The Astrakhan gas-chemical complex (GHK) and Urengoy plant on gas condensate processing were created. Active work on accumulation of volumes and productivity acting and to construction of new UGS was conducted. Decisions on transfer of cars to natural gas and the state program of development of gas cylinder motor transport are made. The mass production of cars on the compressed natural gas (CNG) is begun.

Also quite significant success on the foreign trade direction is achieved. Besides accumulation of volumes of export of the Soviet gas to Europe supply of natural gas to Turkey is begun.
However, in 1989 fuel and energy complex serious structural transformations began in the USSR which, as it became clear subsequently, had harmful impact including on gas industry. For example, the Politburo of the Central Committee of the CPSU unexpectedly made a decision on cessation of work on Yamal. Oil and gas, power and fuel assets in various regions of the country started being split up and subsequently there were separate firms on their base, many of which then became private, including with foreign participation.

Not to lose control of gas industry in new conditions, in August, 1989 Mingazprom was transformed to the State gas concern Gazprom.

Dashing nineties

Right after collapse of the USSR as, however, and in the next years, the gas industry of Russia faced much more terrible threats than party games, traditional for the Soviet Union. Besides that country disorder already led to loss of considerable part of gas assets which appeared suddenly abroad under control not of federal republics but the independent states, so also the reformers who came to the power in Russia simply raved ideas of cardinal reorganization of domestic gas industry, insisting on its partition, and at any cost, and sale by small parts to private business, including foreigners, Approximately as it was made in our country with oil branch from the beginning of the 1990s. Now it is possible to note that Gazprom managed to be defended, though not without some difficulties.

On February 17, 1993 the State gas concern Gazprom was transformed by the Resolution of the government of the Russian Federation in pursuance of the Decree of the President of Russia to the Russian Joint-stock Company (RJSC). In April 1994 its privatization began. On June 26, 1998 by the decision of shareholders of RJSC Gazprom it is transformed to the open joint stock company (OJSC).

The crisis which followed disorder of the USSR provoked general and total non-payments for supply of gas both in Russia and in all former Soviet Union. The most important direction of development of the company became external economic. At the end of 1999 export supply of the Russian natural gas on the new gas pipeline Yamal — Europe began. Besides purely export deliveries Gazprom focused attention on creation of joint ventures with foreign partners.

Meanwhile it did not mean at all that less attention and forces is paid to other directions of development. So, in 1994 development of the Polar oil and gas field and Harvutinskaya Square of the Yamburg field was begun. And at the end of 1996 Gazprom created Mezhregiongaz subsidiary for sale of natural gas in domestic market.

Landmark period

This period became sign for development of Gazprom Group as brought the mass of positive changes. So, in 2001 Alexey Miller was elected the Chairman of the Board of the company. New top management initiated reforming of concern for the purpose of isolation of profile kinds of activity in specialized subsidiaries with a 100 percent share of its participation, such, in particular, as JSC Gazprom UGS and JSC Gazprom Processing. The large-scale project on consolidation of prospecting activity of Gazprom Group is begun in parallel — today all assets are collected within JSC Gazprom Subsoil. Also the task to bring a share of Gazprom in JSC Gazpromtrans to 100% was set. In addition, the decision on consolidation of repair service assets in again created JSC Gazprom Tsentrremont subsidiary is made. Other activities, for example, a scientific complex of Gazprom as well as system of purchases of materials and the equipment for needs of corporation and the enterprises entering into its structure underwent reforming. In addition, fatal decisions on diversification of core business which allowed including further in Gazprom Group new assets for consolidation on their basis oil and electric power generation business (Gazprom Oil and Gazprom Energoholding) were made.

At the same time production of natural gas on Polar and Ety-Purovsky fields, Pestsovaya Square of the Urengoy oil-gas condensate field, the Aneryakhinsky and Harvutinsky areas of the Yamburg field was begun, the Southern Russian oil-gas condensate field is put into operation. Are open the Chugoryakhinsky gas-condensate field on the shelf of the Kara Sea and the Ob gas field in the water area of Gulf of Ob. Gazprom got 50% plus one stock of Sakhalin Energy (Sakhalin-II project).

The Yamal — Europe pipeline is brought to design capacity. Commercial supply of natural gas on the sea export gas pipeline directly from Russia to Turkey Blue Stream was started. The Gazprom Group continued active participation in a number of various projects in the near and far abroad (India, Uzbekistan, Libya, Austria, Vietnam, etc.).

Obvious turn

The 2010s became for Gazprom time of new acquisitions in the neighboring countries and rapprochements with Chinese partners. At the same time the corporation is renamed from joint stock Company into Gazprom PJSC (public joint-stock company).

In ten years the company put Yareyskaya Square of the Yamsoveysky oil-gas condensate field into operation, started production of gas and gas condensate on the Nydinsky site of Medvezhye field. Start-up of the Kirinsky gas-condensate field of the Sakhalin-3 project took place. Industrial gas production on Bovanenkovo gas field is begun, commissioning of system of the main gas pipelines of Bovanenkovo — Ukhta and Bovanenkovo — Ukhta — 2 took place. Total design productivity of two of these gas pipelines is 115 billion cubic meters a year. Southern Kirinsky and Mynginsky gas-condensate fields on the shelf of the island of Sakhalin (Sakhalin-3 project) are open.

Sobolevo — Petropavlovsk-Kamchatsky, Dzhubga — Lazarevskoye — Sochi gas pipelines and the first start-up complex of system Sakhalin — Khabarovsk — Vladivostok are put into operation. Commercial supply of gas on the first gas pipeline Nord Stream through the Baltic Sea to Europe is begun. The first pipeline supply of the Russian gas to China started along «east» route — the Force of Siberia gas-main pipeline (gas of the Chayandinsky field in Yakutia on the basis of which in the region the new center of gas production is created from scratch).

Gazprom finished acquisition of 100% of stocks of JSC Beltransgaz and became the owner of the gas transmission system of Belarus. Beltransgaz is renamed into Gazprom TransGas Belarus. Also the corporation increased a share in authorized capital of ArmRosGazprom to 100% — the enterprise is renamed into Gazprom Armenia. Besides, the Kyrgyzgaz Company transferred to the possession of Gazprom 100% of share in authorized capital of the subsidiary Kyrgyzgazprom. The enterprise is renamed into Gazprom Kyrgyzstan. Objects of gas transmission infrastructure of the Kyrgyz Republic passed to Gazprom by the property right.

In the 2010s obvious turn of Gazprom to the east was noticed. First, the corporation began spending annual Day of the investor in Hong Kong and Singapore that had not been before. Secondly, after many years of negotiations Gazprom concluded with the Chinese China National Petroleum Corporation (CNPC) the largest for all history of the domestic gas industry contract for delivery more than 1 trillion CBM of gas within 30 years along «eastern» route. The Chayandinskoye oil-gas condensate fields in Yakutia and Kovyktinskoye gas-condensate fields in the Irkutsk region were identified as the resource base for gas supplies via the Power of Siberia gas pipeline. The contract provides export to China of 38 billion cubic meters of the Russian gas in a year.

Task number one

Crises which shake the whole world in recent years are not strongly favorable for systematic development. However, as in former years the Soviet gas industry, and now it does not especially stop Gazprom. So, the corporation successfully began production of natural gas on the Semakovsky field in the Yamalo-Nenets Autonomous Area. Natural gas of the Kovykta field began to come to the Force of Siberia gas pipeline on an equal basis with Chayandinsky’s production. The new gas-main is put into operation on all extent, and these are more than 3 thousand km. The Turkish Stream gas pipeline consisting of two threads with a general power of 31.5 billion cubic meters is also started. The first is intended for export of the Russian gas to Turkey, the second one to the countries of the Southern and Southeast Europe. The Amur gas-processing plant (GPZ) is put into operation. Implementation of the program of gas supply and gasification of the Russian regions proceeds accelerated rates.

Gazprom has confidently entered the year 2023. We continue implementation of the drawn-up plans and social obligations. We work for the benefit of Russia. A task number one for us is reliable providing the Russian consumers with gas», — was told by the Chairman of the Board of PAO Gazprom Alexey Miller. According to him, gas production of corporation made 412.6 billion cubic meters in 2022. To foreign countries Gazprom delivered 100.9 billion cubic meters of natural gas, to domestic market went, according to operational data, 243 billion cubic meters. Payments of Gazprom Group in budgets of all levels exceeded 5 trillion rubles. «Development of our Chinese vector is connected also with two perspective routes: from the Far East and through Mongolia. On the first the contract is signed, the second route is studied. The total volume of annual deliveries along three routes is about 100 billion cubic meters of gas», — was added by Alexey Miller.