Gazprom expects 4% drop in gas production in 2022: deputy chairman

Gazprom expects its gas production to fall in 2022 as European customers turn away from Russian imports following the country's invasion of Ukraine, Vitaly Markelov, deputy chairman of the state-owned company's management board, said in an interview published by the company.

"The 2022 gas production plan has been approved at 494.4 billion cubic meters," Markelov said in an interview with a company magazine distributed April 28.

This would be a 4% on 2021 production of 514.8 Bcm.

There are already signs of a drop in output. Gazprom's production in the first 15 days of April was 20.9 Bcm, or an average of 1.39 Bcm/d, according to analysis of Gazprom data by S&P Global. Output averaged 1.47 Bcm/day in March.

The analysis also showed that Gazprom's gas sales in non-CIS countries averaged just 407 million cu m/d in April 1-15, down from a March average of 494 million cu m/day.

In the immediate aftermath of the Russian invasion of Ukraine on Feb. 24, transit volumes via Ukraine rose to maximum contractual levels of around 110 million cu m/d, as Gazprom-contracted gas became more competitive versus hub gas. Since mid-April volumes have dropped. They are planned at 62.9 million cu m/d for April 28, according to Gazprom data.

Gas markets have been highly volatile in recent months, with the European benchmark TTF month-ahead price hitting a record high of Eur212.15/MWh on March 8, according to S&P Global Commodity Insights price assessments. It was last assessed on April 27 at Eur105.50/MWh.

Gazprom suspended supplies to Poland and Bulgaria on April 27 after the two countries refused to pay for gas in rubles. The company said more supply suspensions could follow if other countries refuse to use the new payment mechanism, which was introduced in response to the freezing of some Russian assets abroad.