Gazprom PJSC’s net income for the first half of the year fell to the lowest since 2020, due to the Russian natural gas giant’s sharply reduced flows to Europe.
Net income fell to 296.2 billion rubles ($3.1 billion) in January-June, from 2.5 trillion rubles for the same period a year ago, Gazprom said Tuesday. The producer reported a loss of 18.6 billion rubles in the second quarter.
Gazprom has capped flows to Europe — once its biggest market — since last year amid the growing standoff between Russia and the West over the Kremlin’s war in Ukraine. Almost all major pipeline routes delivering Russian gas to Europe have been halted, with flows to several countries cut off entirely in 2022 after they refused to pay for the fuel in rubles.
“The drop in exports to Europe was partially offset by an increase in supplies to China, which will continue to grow further as part of contractual obligations,” Deputy Chief Executive Officer Famil Sadygov said in a statement, following the financial results.
Still, deliveries to China are just a fraction of what the producer used to send to Europe. Gazprom supplies gas to the Asian nation from its fields in eastern Siberia, which aren’t linked to its pipelines delivering gas to the European Union.
This year, Gazprom’s pipeline exports to China are set to reach 22 billion cubic meters, compared with 15.5 billion last year. In 2021, the last pre-war year, the producer supplied around 177 billion cubic meters of pipeline gas to the European region, including Turkey, according to Bloomberg estimates. This year, westbound flows may only reach 51 billion cubic meters, investment bank Sinara forecast in June.
