Russia’s Gazprom has approved a 16.5% cut in investments next year, marking the second annual reduction in a row, the state gas exporter reported.
Gazprom’s 2020 capital expenditure plan has been set at 1.1 trillion rubles ($18 billion) by the management committee, pending approval by the company’s board of directors. That is down from a projected spend of 1.3 trillion rubles ($21 billion) for this year and a record 1.8 trillion ($29 billion) in 2018, according to The Moscow Times.
Gazprom has gained notoriety for its high levels of spending in recent years, with the bulk of investment going towards the development of its three major export projects: the Power of Siberia pipeline to China, the Turk Stream pipeline to southeastern Europe and Nord Stream 2 to Germany. Work on these projects is now winding down, freeing up some capital.
The $55 billion Power of Siberia pipeline began pumping gas to China earlier this month, while the $8 billion Turk Stream to Turkey is targeted for launch in January. However, there may be some delays as Russian President Vladimir Putin claimed at the start of December that Bulgaria is under “international pressure” to delay the pipeline project, while a section via neighboring Serbia is nearly finished.
The $11 billion Nord Stream 2 is also nearing completion, but is not expected to start up until mid-2020 because of earlier permitting delays in Denmark.