On 14 January, Prime Minister Petr Necas opened the Gazelle gas pipeline at the Czech-German border in the presence of representatives from Germany and Russia. Gazelle is the extension of Nord Stream’s branch running through the Czech Republic.
On 10 January, Gazprom and Novatek OAO (the largest independent gas producer in Russia) signed an agreement to form a joint venture to produce liquefied natural gas (LNG) on the Yamal Peninsula. The agreement is further evidence of Russia's growing interest in LNG production, which has been observed in recent years. It forms part of Russia's declared strategy of diversifying the markets for its domestic gas.
On 25 December, one year ahead of schedule, President Vladimir Putin officially opened the second section of the East Siberia-Pacific Ocean (ESPO-2) oil pipeline running from Skovorodino (Amur Oblast) to the Kozmino sea terminal (Primorsky Krai). The construction of ESPO-2, which is 2,046 km long and has an annual capacity of 35 million tonnes, has cost a total of US$10.6 billion. At the same time, the capacity of the Tayshet–Skovorodino section has been increased to 50 million tonnes.
Gazprom is determined to continue its efforts to build the South Stream gas pipeline regardless of the slump on the European gas market and the fact that there is sufficient capacity already in the existing transport infrastructure. The official inauguration of the maritime section of South Stream was held on 7 December this year, but the construction itself will commence in 2014.
On November 15, the Bulgarian state-owned gas distributor Bulgargaz signed a ten-year contract with Russian Gazprom regarding the annual purchase of 2.9 billion m3 of gas. The contract will come into force at the beginning of 2013. Details of the deal are subject to commercial confidentiality but Bulgaria’s Prime Minister Boyko Borisov announced that they include a 20% decrease in gas prices and the withdrawal from existing services provided by the two intermediaries: Russian-Bulgarian Overgas (ownership: 50% Gazprom, 50% Overgas Holding) and Russian-German WIEE (ownership: 50% Gazprom, 50% Wintershall).
On 30 October, Gazprom’s Board of Directors approved a change in the investment programme for this year. The company plans to increase its capital expenditure for investment to around $31 billion (a rise of about 25% compared with the original programme approved in December 2011). The document foresees that most of this amount (over $27 billion) will be allocated to production, specifically extraction projects and the construction of gas pipelines.
Russia’s Gazprom and the state-controlled Serbian and Hungarian energy companies on 29 and 31 October passed final investment decisions concerning the construction of the Serbian and Hungarian sections of the South Stream gas pipeline. Bulgaria, whose consent is necessary for the investment to be implemented, has promised to pass a similar decision on 9 November.
In recent weeks, shares in Ukraine’s regional and local natural gas distribution companies (NGDCs) have been privatised; these previously belonged to the state-owned Naftogaz. Fourteen of the seventeen winners of competitions were business structures linked to Dmytro Firtash, one of the most influential businessmen in Ukraine.