Russia's Gazprom Trims 2015 Gas Production Plan Again


MOSCOW, May 19 (Reuters) – Russia's top natural gas producer Gazprom has cut its 2015 production plan to 450 billion cubic metres (bcm) after warmer weather hit demand, company officials said on Tuesday, the second such downward revision in a week.

The forecast is still higher than the 444.4 bcm of gas the company produced last year, an all-time low. Last Thursday, Gazprom had revised its production plan for 2015 to 471 bcm.

"In total we expect around 450 billion (cubic metres) this year," said Vsevolod Cherepanov, a member of Gazprom's management board.

Vitaly Markelov, another management board member, said Gazprom had suffered from a mild winter, which hit gas demand.

As of 0900 GMT on Tuesday, Gazprom's shares were down 1.1 percent, underperforming the broader Moscow stock market which lost 0.65 percent.

Gazprom, which accounts for 8 percent of Russian gross domestic product, has faced stiff rivalry from other domestic gas producers, such as Novatek, as well as from sluggish demand in Europe.

Sberbank CIB investment bank says Gazprom's rivals have almost doubled their share of the Russian gas market to 35 percent in 2014 from 18 percent in 2009.

Gazprom said gas pipes initially ordered for the South Stream underwater pipeline that was scrapped in December would now be used for its planned replacement, Turkish Stream.

Gazprom reached an agreement with Turkey to start gas supplies via the Turkish Stream pipeline in December 2016. It plans to start laying pipes for the project in early June.

Gazprom plans to supply up to 63 bcm of gas per year via Turkish Stream and to create a gas hub on the Turkish border with Greece, through which it wants to transit 47 bcm annually.

(Reporting by Vladimir Soldatkin and Jack Stubbs; Editing by Gareth Jones)


Copyright 2016 Thomson Reuters. Click for Restrictions.


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