Gazprom set to raise investment to $31 billion

MOSCOW - Reuters

Gazprom, Russia’s top gas producer, has increased its investment program by a quarter as it embarks on ambitious projects to tap the Arctic Yamal peninsula and increase exports to Asia.

The company, which some analysts have criticized for what they see as excessive spending, traditionally increases its capital expenditure forecast several times during the course of a year.

Gazprom yesterday increased this year’s investment program by 198 billion roubles to 974.65 billion roubles ($30.98 billion). Capital investments will total 890 billion roubles.

Gazprom has started to develop the huge Bovanenkovo oilfield in Yamal, located hundreds of kilometres north of its traditional West Siberian deposits, which has become increasingly depleted.

Vast infrastructure investments
From Bovanenkovo, gas will enter Russia’s trunk network and be pumped on to Europe, where Gazprom covers a quarter of the continent’s gas needs. The company set up a 1,110 kilometers-long pipeline to the south-east from the field.

Gazprom said yesterday that investment will be increased for the trunkline systems construction.

Earlier this week, Gazprom pledged over $38 billion to develop an East Siberian gas field and build a pipeline to the Pacific port of Vladivostok.