Gazprom: breakout strategy

Gazprom is under double pressure. It is becoming more and more difficult for the company to maintain a dialogue with the EU that perceives the gas giant as instrument of political pressure by Russia.

Ukraine is again on the agenda both as a capricious consumer and a shrewish transit state. Large independent gas producers continue attacking Gazprom on the domestic market; they are suffering from sanctions and count on expansion of their share on the Russian gas market as compensation.

Gazprom is looking for a way-out, including sharp intensification of its Eastern policy. The Russia-West confrontation made diversification of Russian exports to the Asia Pacific region not just urgent and desirable. This is the only possible strategy from the point of view of survival.

The question is about the scale and the pace of this process. The possibility that large-scale gas supplies to China will be carried out at the expense of exports to other directions is as high as never before.

However, Moscow still counts on restoration of partnership ties with Europe and preservation of the huge potential of mutually beneficial cooperation that has been accumulated over the past 40 years of Russian natural gas exports to Europe.

There are significant changes on the domestic natural gas market. The share of independent gas producers in the area of the Single System of Gas Supplies has already surpassed a 40% threshold, which leads to unprecedented decline in gas production by Gazprom amid stagnation on the market. Numerous systemic imbalances create risks for normal functioning of the Russian gas sector, which requires an extremely accurate approach of the state as regulator.

The sanctions have not directly affected Gazprom but its financial standing is influenced by a number of negative factors, e.g. non-payments by consumers and decreased export prices, as well as the necessity to increase investments in new large-scale projects.

Key topics of the report:

• Gazprom and Ukraine: what comes next?

  • The “winter package”, preservation of transit risks
  • The essence of reverse supplies
  • Prospects of Ukraine as consumer of Russian natural gas

• Gazprom in Europe

  • Transformation of the European gas market, Gazprom’s standing
  • Gazprom’s search for a new strategy in Europe
  • Changes in Gazprom’s exports

• The course to the East

  • The first gas contract with China
  • Prospects of the “western route” of gas exports to China
  • LNG in Russia’s Far East, export ambitions of Rosneft

• The domestic gas market at the crossroads

  • An optimal market model amid excessive capacities
  • The consumption dynamics
  • Price regulations, the launch of exchange trade
  • Debates about reforms in the Russian gas sector

• Gazprom’s finances amid sanctions

  • Gazprom’s financial standing
  • Investment program The state fiscal policy
  • The state fiscal policy

• The forecast of developments

Contents of the report: