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President of Russia Vladimir Putin: Good afternoon, Mr Miller. How are you doing?

Gazprom CEO Alexei Miller: Mr President, we are completing the autumn-winter heating season. As always, we have been able to meet the demand of our Russian and foreign consumers.

Since the beginning of the season, Gazprom has pumped 72.232 billion cubic metres of natural gas into its underground storage facilities. The daily output since the beginning of the season has set a record: 843.3 million cubic metres of gas.

As of today, Gazprom’s production capacity is 545 billion cubic metres of gas, which means that including the gas stored underground…

Vladimir Putin: Is that annual capacity?

Alexei Miller: Yes, our annual production capacity. Given this capacity and the gas in our underground storage facilities, we can double gas deliveries to Russian customers in the first quarter. This is our safety factor. And, undoubtedly, before the end of the autumn-winter season, we will completely fulfil our obligations to our consumers.

As for last year’s production, it was 500.1 billion cubic metres of gas; 199.3 billion was exported. This is slightly less than in 2018, which was a record year: we exported 201.8 billion [cubic metres of gas] and preserved our share on the European market at 35.6 per cent.

Regarding current market trends, the market has slightly fallen. Still we are optimistic about the third and fourth quarters. We believe that winter preparations will also go as planned, so it is probably too early to make any preliminary conclusions even for the first months.

As for our plans for 2020, the investment programme is expected to total 1 trillion 80 billion rubles. The financial opportunities and financial stability of the company will allow us to fully implement it. The net debt-to-EBITDA ratio is 1.3 – this is a very good investment-rating ratio. And today we are saying that there will be no problems with meeting our obligations to finance the investment programme in 2020.

We plan to build 1,942 kilometres of main gas pipeline and put into operation 114 wells. Work will get underway, with three integrated gas treatment units with a capacity of 27.5 million cubic metres of gas and 114 wells to go online. We plan to increase the volume of underground storage by 180 million cubic metres of gas.

And, no doubt, the line section will involve the construction of a gas pipeline to supply gas to Nord Stream 2 (Gryazovets – Volkhov – Slavyanskaya compressor station) and the further development of the new Kharasaveisky field in Yamal, which is now our next major site to create a new gas province in Yamal.

In September 2019, you issued instructions to study the issue of gas supplies from Irkutsk Region, Krasnoyarsk Territory, the Yamalo-Nenets Autonomous Area and Yamal for consumers in Eastern Siberia. Mr President, the work has been completed, and I am ready to report that, first of all, based on the resources of Yamal and the Nadym-Pur-Tazovsky region of the Yamalo-Nenets Autonomous Area, as well as on the resources of the Kovyktinsky field and the resources of Krasnoyarsk Territory, we can fully meet the gas needs of such regions of Eastern Siberia as Krasnoyarsk Territory, Irkutsk Region, the Republic of Buryatia and Trans-Baikal Territory. And, no doubt, we will be able to solve the environmental problems that some of the large industrial centres of Eastern Siberia still have.

The volume of natural gas deliveries to the domestic market with the use of the material resources that have been provided allows us to fully meet the demand in these regions of Russia. As regards the instruction to consider opportunities for transit gas deliveries through Mongolia to China via the Power of Siberia 2 pipeline, volumes can reach 50 cubic metres per year. We are ready to continue the work.

Vladimir Putin: To Western China, right?

Alexei Miller: Yes, to Western China, for major natural gas consumption areas in China.

To continue the work, I ask you to give an instruction to proceed to the pre-investment stage as regards both the line section and the programme for developing the project's resources, and subsequently, starting survey and exploration work.

As regards the line section, you have always set the task – which is an absolute priority in itself – of connecting the natural gas transportation capacity currently available in Western Siberia with the gas transportation capacities and supply systems in the European part of Russia. This will definitely allow for reverse and forward flow supplies in both directions, and will boost the reliability of natural gas deliveries to Russian regions.

Vladimir Putin: And how is work proceeding on connecting the capacities in Western Siberia with those in the European part of the country?

Alexei Miller: A technical and economic study has been conducted, which has shown that this is a reasonable and economically efficient project. I ask you to give an instruction to proceed to the pre-investment stage, which involves conducting a feasibility study and starting survey and exploration work for the Power of Siberia 2 natural gas pipeline.

Vladimir Putin: Yes, of course. Agreed.

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