Gazprom Plans 10% Hike in 2021 Gas Output

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Russia’s Gazprom is planning a nearly 10% increase in natural gas production this year, as global gas demand recovers in the wake of the Covid-19 pandemic. The state gas giant expects to produce 496.9 Bcm this year, up from 453.5 Bcm in 2020, Deputy CEO Vitaly Markelov told an in-house magazine Friday. Last year, output fell some 9% from slightly above 500 Bcm in 2019, mainly due to a drop in exports. In contrast this year, Gazprom has increased domestic gas sales and exports, mainly due to a cold winter. Domestic sales increased 19.5% over the first quarter compared to last year to some 108.5 Bcm. Exports to Europe and China rose 28.4% to 60.5 Bcm over the same period. Exports to Europe, its key overseas market, were buttressed by weaker competition from LNG, which was mostly redirected to higher-priced Asian markets (IOD Apr.5'21). Sales exceeded production, which totaled 158.1 Bcm in the first quarter, up 12% on the year, as Gazprom opted to sell gas from underground storage, both domestically and in Europe. Besides natural gas, Gazprom plans to produce 18.1 million tons of gas condensate in 2021, up from 16.3 million tons in 2020, Markelov said. At the same time, Russia’s second-largest gas producer and LNG export champion Novatek plans to increase gas output by some 3% to around 78 Bcm this year from 77.4 Bcm in 2020, CEO Leonid Mikhelson said Friday.

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