Gazprom has announced that the start of gas deliveries to European customers through the South Stream route will be postponed, beginning instead at the end of 2014 or during 2015, rather than in 2013. The delay was announced on Friday during a presentation to investors, reported by the Moscow Times on Monday.
The reason for the delay is the reduction of Gazprom’s investment costs under new circumstances, as well as new project estimates indicating that this pipeline system may require as much as $31 billion or €24 billion instead of the planned $20 billion. It was also announced that Gazprom is reducing its investment plans for this year by 14 percent, to $29 billion from $33.6 billion last year.
‘Gazprom is adapting to the new economic reality,’ commented an analyst from Russia’s Alfa Bank after the presentation, with the budget based on an oil price of $50 per barrel. Less favorable scenarios for Gazprom are also mentioned, with oil prices at $40, $30, and even $25 per barrel. Exports to Europe could fall by five percent this year, and the average price for a thousand cubic meters of gas could drop from $409 last year to $280. (Davorka Zmijarević)
