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Gazprom: are there Limits to the Growth?

Gazprom: are there Limits to the Growth?

Gazprom is turning into the most expensive company on the world market, accumulating resources, acquiring assets and carrying out aggressive expansion into Europe.

However, the monopoly’s management is turning out to be an outstanding problem with representatives of various clans inside the company having different visions on what Gazprom should be. Another problem that has been recently discussed is shortage of gas for long-term export contracts and for the needs of the domestic market. The discussers are mainly western watchers and some Russian ministries.

Gazprom itself displays composure, assuring it is able to boost production in case of shortage. Who is right then? Will Gazprom successfully permeate into oversea markets and expand at home or will it fail to fulfill long gas supply contracts? You are sure to find the answers in the new report prepared by the National Energy Security Foundation that analyzes key processes inside and around Gazprom.

The paper dwells on the following subjects

  • The picture inside Gazprom ahead of the big elections

    • Transformations and turnover
    • In-fighting
    • Degradation of the directors’ board
    • Controversy with the economy ministers – causes and consequences
    • Main Gazprom’s enemies in the power structures

  • Attempt to reform the home gas market – response to the shortage challenge

    • Long-term contracts and new pricing pattern
    • Soaring investments against the background of deteriorating effectiveness of the spending
    • Show-off gas supplies and attempts to reduce domestic gas consumption
    • Arrival in the coal and electricity business

  • Escalating competition for Central Asia’s resources and conflicts with CIS gas consumers

    • New risks in Turkmenistan and the Trans-Caspian gas pipeline
    • The conflict with Belarus and the crisis in Ukraine – the transit turmoil

  • Moscow’s gas diplomacy

    • Gas OPEC threat and the wrangle with the European Union
    • The North Stream and the new channel to the Southern Europe
    • Crusade for the retail gas markets
    • Relations with oversea corporations: competition on Sakhalin and for Kovykta and at the same time joint efforts to polish off YUKOS

  • Predictions of how all key processes will develop in the future

The content of the report:

Introduction 2
Chapter 1. Gazprom Ahead of Elections. New Expansion Goals 4
1.1. Will Gazprom Become a Platform for the Dmitry Medvedev’s Presidential Campaign? 4
1.2. Personnel Turnover in the Monopoly 5
1.3. Regrouping of Assets inside the Company 8
1.4. Gazprom’s Board of Directors: Further Derogation of Influence 9
1.5. Repartition of RAO UES’s Assets. Acquisition of SUEK 12
1.6. Auction of Yukos’s Gas Assets. The Italian Scheme 13
1.7. Sharing of Property in the Oil & Gas Sector in the Favor of Gazprom and Persons Affiliated with the Company 15
Chapter 2. Gazprom’s Expansion on the Domestic Market. Big Projects Mean Big Problems? Pricing Issues 18
2.1. General State of the Gas Market. Future Fuel Policy 18
2.2. Misbalance between Liberalization of Power Industry and Establishment of a Full-Fledged Gas Market 20
2.3. The Problems on the Way of Gas Industry Reformation in Russia. The Long-term Contracts System 22
2.4. The Role of Independent Gas Producers in Russia 23
2.5. Gazprom’s Investment Priorities 26
2.6. New Tax Changes in the Gas Industry 28
Chapter 3. Central Asia and CIS. Risks Associated with Resources and Transit 30
3.1. Competition for Central Asia the Central Asian States are Playing Diversity of Gas Supplies 31
3.2. The Transit Problem Competition with the «Slav Mediators» 35
3.3. Gas Standoff with Azerbaijan and Georgia 38
Chapter 4. Gazprom’s Export Strategy. Standoff with the European Union and Frustrated Alliances 39
4.1. Gas OPEC and Energy NATO: Political Mythology 39
4.2. Crusade for European Markets: Attempts to Access End Consumers 42
4.3. Construction of New Gas Pipelines to Europe: Nord Stream and the South-European Gas Pipeline 47
4.4. The Shtokman’s Dilemma and the Gazprom’s LNG Strategy 48
Chapter 5. Medium-term Forecast 51
5.1. Political Future of Gazprom and the Risks of Losing Control of the Gas Giant 51
5.2. The Outlook for the Transformations in the Gas Industry 52
5.2. Obstacles for the Oversea Expansion 54


Date of publication Volume
May 21, 2007 54 pages


If you are interested to obtain please contact » Elena Kim

Other issues:
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Nord Stream 2 and Ukraine: Costs Should Decide
Shale Revolution: Myths and Realities
Liquefied Natural Gas Outlook: Expectations and Reality

Analytical series “The Fuel and Energy Complex of Russia”:

Outlook for Russian LNG Industry
Russian Energy and West One Year after Ukraine Conflict Began: Are There Connections Still?
Green Agenda in Russia during Bitter Conflict with West
After February 2022 the agenda was radically rewritten. Western companies began leaving Russia en masse, economic relations with the West were drastically reduced, and the Russian economy began to be pushed violently from the global economic space, hemmed in by sweeping sanctions. All that was, to put it mildly, not the best background for talking about ESG. Especially because tasks of survival and stability under unprecedented pressure became the priority in the economy. In late 2022, however, attempts to reanimate the ESG agenda already became obvious. The message is put across insistently that it is important to Russia regardless of the foreign policy situation. While earlier the “green pivot” was seen as an opportunity to attract Western investors and their technological solutions to Russia, now Keynesian reliance on domestic manufacture is discussed.
Oil and Gas Sector Regulation in 2022 and Prospects for 2023
Gazprom at the Forefront of Economic and Political Battles with Europe
Gazprom is being actively thrown out of the market. Its annual supplies to Europe have shrunk from the previous 150 billion to 65 billion cubic metres of gas. European officials assure that they have already learnt how to live without Russian gas, so they will bring its purchases down to but nominal values in 2023. Their main hope is liquefied natural gas. Today the EU must make a crucial decision: whether it has passed the point of no return in gas business with Russia and whether it is certain that its economy will endure without supplies of Russian pipeline gas. Or, on the contrary, Europe will realise after all that the gas balance will not be achieved and the payment for so headlong a rush for LNG will be disproportionate. Assessment of the potential volume of LNG that will appear on the market before the end of the current decade will be the most important factor for making the decision.

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07
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