Russia’s Gazprom expects increase in 2022 revenue

MOSCOW (Reuters) -Russian gas giant Gazprom showed very good results in the first half and its 2022 revenue will exceed last year’s, CEO Alexey Miller said on Wednesday, as soaring prices more than offset a steep decline in gas production and exports.

Gazprom has stopped formally reporting financial results since Moscow sent its troops into Ukraine on Feb. 24 in what it calls a “special military operation”, but officials have continued to give an indication of the company’s performance.

Natural gas output was 288.1 billion cubic metres (bcm) in January-August, with exports to non-CIS countries accounting for 82.2 bcm, Miller said without providing comparisons.

Gazprom has said output from Jan.1 to Aug. 15 fell by 13.2%, while exports outside the former Soviet Union plummeted by 36.2% year on year against the background of a standoff with the West over Ukraine.

On Tuesday, Gazprom said it made a record 2.5 trillion roubles ($41.75 billion) in net profit in the first half of 2022, with its board recommending an interim dividend after skipping its annual payout for the first time since 1998.

Miller, a long-standing ally of President Vladimir Putin, also said the West had made a mistake by refusing long-term Russian gas supply contracts.

He reiterated that spot gas prices may exceed all-time highs due to sanctions and wrong decisions by Western regulators.

“According to a conservative estimate, if current market trends continue, the price at the autumn-winter peak may exceed $4,000 per thousand cubic meters,” he said on social media, equivalent to around $390 per megawatt hour (MWh).

Front-month Dutch gas, the European benchmark, spiked to a record-high above 300 euros ($300) per MWh last week amid tight Russian supplies.

Miller also said gas exports to China grew 60% year on year in the first eight months of 2022, while Russia’s gas storage is 92% full.

($1 = 0.9997 euros)

(Reporting by Oksana Kobzeva and Vladimir Soldatkin; editing by Jason Neely, Kirsten Donovan)