Gazprom Gas Output at All-Time Low

Gazprom Gas Output at All-Time LowGazprom Gas Output at All-Time Low

Russia's Economy Ministry said on Tuesday it expected gas production at Gazprom to decline to 414 billion cubic meters this year, an all-time low, due to sluggish demand and a decline in upstream investments.

Gazprom, Russia's and the world's biggest natural gas producer, said in its latest forecast in May that it expected its natural gas production to recover this year to 450 bcm after it declined last year to just above 444 bcm, Reuters reported.

The ministry figures were published after it announced Russia's gross domestic product shrank by 4.2% in June from a year earlier, when the country's growth prospects deteriorated sharply due to western sanctions over the Ukraine conflict and a drop in the price of oil. Gazprom, which normally accounts for around 8% of Russian GDP, earlier this year stopped publishing its gas output on a monthly basis via monitoring agency CDU TEK at the energy ministry.

The ministry said Gazprom's gas exports to the EU and Turkey declined by 6.2% to 66.8 bcm in the first half of the year due to lower gas consumption in Europe and increasing gas usage from storage facilities in winter.

It sees total Russian gas exports at 164.6 bcm in 2015, down 5.5% from the last year. It also said Russia's average export price for gas stood at $249.7 per 1,000 cubic meters in January-May, down from $335.7 in the year-earlier period.