Gazprom to Invest $24.7Bln in 2009

ReutersGazprom deputy head Alexander Medvedev, left, and spokesman Sergei Kupriyanov at a gas forum meeting Tuesday.
Gazprom's board approved on Tuesday its investment program and budget, which calls for 2009 capital spending of 699.88 billion rubles ($24.7 billion).

The company also plans long-term financial investments of 220.56 billion rubles, bringing total spending to 920.44 billion rubles, Gazprom said in a statement.

The 2009 budget provides for total cash income and revenue of 3.72 trillion rubles. It estimates liabilities, expenditure and investments at 3.8 trillion rubles, financial borrowings of 90 billion rubles and a budget surplus of 500 million rubles. Gazprom expects an 11.3 billion ruble effect from cost-cutting measures.

Chief executive Alexei Miller said separately on Tuesday that the price of oil and gas did not reflect true supply and demand for energy. Miller met with ministers from the Gas Exporting Countries Forum.

Gazprom will start loading Russia's first cargo of liquefied natural gas in two months, as it seeks to supply consumers beyond the reach of the pipeline network. LNG is gas that has been cooled to a liquid to allow transportation by tanker.

Loading will begin Feb. 19 at Gazprom's Sakhalin-2 project north of Japan, Deputy CEO Alexander Medvedev said Dec. 19. The process will take several weeks, he said.

Gazprom, which now only exports to European customers via pipelines, aims to become a global energy supplier by selling LNG. LNG from Sakhalin Island will reach customers in Japan, Korea and North America.

UBS said Monday that Russian stocks including Gazprom could rebound next year following a "triple whammy" of negative factors in 2008.

A slowdown in global economic growth that hurt commodity prices, the global financial crisis that boosted borrowing costs and Russia-specific ailments including "deteriorating" corporate governance and forced selling to meet margin calls pushed the 50-stock RTS Index down 71 percent, UBS said.