FSUOGM: Gazprom to use gas crisis windfall to boost capex

Capital spending levels at Russia’s Gazprom are once again creeping upwards, as the company prepares to ramp up gas supplies to China and expand development in the Russian Arctic.

Gazprom has earned handsome profits during the European gas crisis this year and intends to plough some of that windfall cash back into new infrastructure.

The state-owned gas behemoth has abandoned its promise of less than two years ago to be more fiscally prudent, spurred on by soaring gas prices that have led to a spike in its profits.

Under a programme announced on November 26, the company plans to invest RUB1.76 trillion ($23.3bn) in 2022, up from a target of RUB1.185 trillion for this year. Gazprom’s actual capital expenditure next year is projected to amount to RUB1.4 trillion, but additional funds in the investment programme will go towards long-term financial investments and the purchase of long-term assets, its management has said. Borrowing from outside the company is anticipated to total RUB272.8bn in 2022.

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