Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Gazprom Sees Output Down 10%

Gazprom believes that global demand and its own gas production will be depressed by about 10 percent for the next four to five years, deputy chief executive Valery Golubev told an energy conference Thursday.

"A reduction in demand of 10 percent will continue for the next four to five years," Golubev said.

He said the world's largest gas producer, which supplies a quarter of Europe's gas demand, would produce 492 billion cubic meters this year, down 12 percent from the planned 561 bcm and 10 percent down from about 550 bcm last year.

In terms of volumes, the drop would amount to 60 bcm -- enough to meet the needs of a country such as France for a year and a half.

"Basically, Gazprom is being knocked back 22 years," said Mikhail Korchemkin from East European Gas Analysis, adding that the last time Gazprom produced such low volumes was in 1987.

"A cut in production volumes will inevitably affect Gazprom's investment plans," said Korchemkin, who added that Gazprom could now afford to delay key projects by three to five years.

Golubev said demand in Europe could start recovering from the third quarter and added that he saw Gazprom's positions in Europe declining by 2020, as it would focus on liquefied natural gas exports and deliveries to Asia.