Gazprom on Wednesday stepped back from a production target of 529 billion cubic meters of gas for this year, given by chief executive Alexei Miller in April, after demand for the fuel slumped last month. The gas giant plans to produce 519.3 bcm of gas this year, said Vsevolod Cherepanov, head of the gas, condensate and oil production department. “Gazprom is now revising down figures because of a lack of demand,” Cherepanov said. The company aims to produce 528.6 bcm of gas next year, he said. Gazprom, the world’s biggest gas producer, had said demand was recovering from the impact of the global economic crisis after the first half of last year. Cold winter weather boosted consumption in Russia and Europe, its biggest export market. The company’s output slumped to 462 bcm last year.
“During the first four months of the year, we exceeded our plan by 4.6 billion cubic meters,” Cherepanov said. “Yet, from the middle of May we are witnessing a situation similar to last year: a sharp decline in gas consumption and, as a result, in production.” Gazprom, which supplies about a quarter of Europe’s gas, has been pressured to adjust its take-or-pay contracts as customers switched some gas purchases to the spot market, where prices are now lower. Russia’s total output may exceed pre-crisis levels next year, Deputy Energy Minister Sergei Kudryashov said Wednesday, Interfax reported. The ministry earlier said output may be 643 bcm this year, the service said.
Gazprom, which accounts for about 80 percent of Russia’s total output, may produce 542.4 bcm in 2012 and 565.5 bcm in 2013, Cherepanov said. Gazprom output reached 556 bcm in 2006, according to the company’s web site. The gas producer will probably invest between 670 billion rubles ($21 billion) and 780 billion rubles a year for at least a decade, said Sergei Pankratov, deputy head of the strategic development department. About a quarter of the total amount, or between 160 billion rubles and 190 billion rubles, will be invested in gas production, he said. Half of the investments will go toward gas transportation, including 240 billion rubles to expand existing links and build new pipelines and 110 billion rubles on upgrades, he said.