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Gazprom Cuts March Gas Output as Novatek Production Rises

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April 2 (Bloomberg) -- Russia, holder of the world’s biggest natural-gas reserves, increased output 0.9 percent in March from a year earlier, led by OAO Novatek, while OAO Gazprom cut production.

Gazprom, the state-controlled gas producer and exporter, pumped 47.2 billion cubic meters last month, down 1.4 percent from a year earlier, according to the Energy Ministry’s CDU-TEK unit. Novatek, Russia’s second-biggest producer, boosted output 11 percent to 4.87 billion cubic meters. Together, the two companies accounted for 84 percent of Russia’s 62.2 billion cubic meters of output in March.

“Gazprom has been operating at its maximum available capacity,” Valery Nesterov, an analyst at Troika Dialog in Moscow, said by phone. “There is some potential for the second half. Gazprom has Bovanenkovo coming up. It should remove some tension.”

Gazprom moved up the start of output at the Bovanenkovo field on the Yamal Peninsula to June 2012 from the third quarter to compensate for declines at mature fields in western Siberia.

President-elect Vladimir Putin ordered Gazprom, the world’s biggest gas producer, to make sure it can meet demand after shortfalls during a cold snap earlier this year. Putin told Gazprom to expand gas grids and build storage facilities, and meet both domestic and international demand, according to a transcript of a March 23 meeting on the government website.

Gazprom failed to meet some requests for increased gas supplies from Germany, Italy and other European partners during extremely cold temperatures on the continent in February.

Energy Minister Sergei Shmatko said at the March 23 meeting that there is “a significant role of independent gas producers” and called on Gazprom to ease access to the national pipeline network for such producers.

Novatek, controlled by billionaires Leonid Mikhelson and Gennady Timchenko, the co-founder of energy trader Gunvor Group, said March 12 it aims to increase gas production about 6 percent to 7 percent this year. Output reached 52.9 billion cubic meters last year.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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