Gazprom Forecasts 2013 Gas Output at 495.7 Billion Cubic Meters, European Exports Up 9.4%

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Researched by Industrial Info Resources (Sugar Land, Texas)--Russia's state-owned natural gas exporter Gazprom OAO (OTC:OGZPY) (Moscow, Russia) announced its forecasts for the natural gas market in 2013. Gazprom expects to produce 495.7 billion cubic meters (bcm) of gas in 2013, and increase this to 518 bcm per year in 2014-15. Last December, the Russian daily Vedomosti reported that the Gazprom's 2012 gas production is expected to come in at 504.1 bcm, down 1.8% from 2011's 513.2 bcm. The company has not reported its annual results for 2012.

According to a company presentation, Gazprom also expects European exports of 151.8 bcm in 2013, up 9.4% from 138.8 bcm in 2012. Gazprom said 2012 profit would be down 15% from 2011 at $38 billion.

Gazprom said it would set aside $4.7 billion to refund European customers in 2013 after price cuts, after paying back $2.7 billion last year. Gazprom's custom-ers in Europe paid an average of $402 per 1,000 cubic meters for gas supplies in 2012. Gazprom's average gas sales price for its Commonwealth of Independent States (CIS) and Baltic customers was $308 per 1,000 cubic meters in 2012.

Gazprom is also facing pressure from a European Union antitrust probe into its practices in central and eastern European markets.

Gazprom Deputy CEO Alexander Medvedev has reiterated that the company does not plan to give up the gas price link to the oil prices. In an investor day meeting in Moscow on Friday, Medvedev said that the recent growth in European prices has indicated that Gazprom and other producers have managed to preserve the oil linkage.

Recently, Gazprom began construction of South Stream pipeline to ship natural gas to southeastern Europe. The total cost of the project is forecasted to be some $40 billion. For additional information on South Stream Pipeline, see January 31, 2013, article - Gazprom Plans to Invest $16.9 Billion in Gas Transportation Sys-tem to South Stream Pipeline.

Gazprom said in its presentation that it expects gas exports to Europe to rise to 151.8 bcm in 2013, from 138.8 bcm in 2012, while overall gas output is expected to reach 495.7 bcm in 2013.

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