Address to Shareholders by Viktor Zubkov, Chairman of the Board of Directors of Gazprom PJSC, and Alexey Miller, Chairman of the Management Committee of Gazprom PJSC
For many years, as a global energy company, Gazprom PJSC has been confidently pursuing its mission of reliably and efficiently supplying consumers with energy resources. In the long term, the need for affordable and clean energy will increase along with the development of the global economy. Thanks to the possibilities offered by the use of gas, its role will only increase.
The gas business is a key component of Gazprom PJSC’s activities. In 2021, the Company achieved record results and strengthened its leadership position in the global energy industry.
One of Gazprom’s main competitive advantages is its ability to rapidly increase production volumes. In the reporting year, gas production in Russia increased by more than 60 billion cubic meters to about 515 billion cubic meters — the best figure in the last 13 years. Thus, a third of the increase in global gas consumption in 2021 was covered by the increase in gas production by Gazprom. Considering market conditions, the Group has achieved the highest financial result in its history.
Gazprom PJSC values its reputation as a reliable supplier. In 2021, as always, the Company fulfilled its obligations to consumers in full. In particular, we ensured a reliable gas supply to Gazprom’s priority domestic market in the face of significantly increased demand.
The company continues to develop the potential of the domestic market. Systematic work aimed at the full technically possible network gasification of Russia is being carried out. Over the past year there were 342 more gasified settlements in Russia.
Unique experience and expertise, constant development of the world’s largest resource base and a large-scale production complex are the key to the Company’s successful resolution of current and long-term strategic tasks. They are closely linked with the increasing level of technology and the introduction of knowledge-intensive domestic developments, digitalization of business processes, and concern for the preservation of the favorable environment.
All of the 2021 production plans were fulfilled. Thus, the discovery of new gas reserves again, for the seventeenth year in a row, surpassed production. First of all, the increase is associated with the fields of the Yamal gas production center, Russia’s main one in the XXI century. The Bovanenkovskoye Field in Yamal has reached a milestone: the annual production of gas has passed the 100 billion cubic meter mark for the first time. A number of fields, including the Kharasaveiskoe Field, which is unique in terms of reserves, are to be commissioned.
The geographical location of the Yamal center makes it possible to organize gas flows both to the east and the west. To make use of this advantage, Gazprom is working on the Power of Siberia 2 project.
Gazprom’s active work in Eastern Russia provides an impetus for the full-scale use of gas in the Eastern Siberian and Far Eastern regions of the country. At the same time, the Company is developing a powerful export channel focused on the most promising foreign market — China.
In 2021, Gazprom PJSC reached a new level of gas supplies to China via the “eastern” route — the Power of Siberia gas pipeline — as stipulated by a bilateral long-term contract. Chinese partners were convinced of the Company’s reliability as a supplier, especially during the last fall and winter period, and in early February 2022 a second long-term contract was signed for export via the Far Eastern route. The total volume of supplies will grow to 48 billion cubic meters annually. Taking into account Russia’s Power of Siberia 2 pipeline and its continuation through Mongolia — the Soyuz Vostok gas pipeline — gas exports to China could be increased by another 50 billion cubic meters per year.
Another important segment of Gazprom’s business is the processing of natural gas components into products that are in demand in the gas chemical and other industries. In 2021, the Amur gas processing plant was put into operation, and the construction of an ethane-containing gas processing complex on the Baltic Sea coast began. These enterprises are among the world’s largest and are strategic for the Company’s business diversification.
Gazprom’s oil and electric power businesses are developing dynamically. A significant event in the reporting year was Gazprom PJSC Neft’s achievement of its strategic hydrocarbon production target of over 100 million tons of oil equivalent. Gazprom Energoholding LLC showed an increase in its electricity and heat generation figures, and its heat output was a record high in the reporting year.
Gazprom PJSC will continue to use all opportunities and competitive advantages to achieve its goals, while maintaining a focus on a high level of social responsibility. Gazprom works for the well-being of society and the energy security of Russia.
Chairman of the Board of Directors of Gazprom PJSC