Russian Gazprom's quarterly profit falls on lower export prices, volumes

By Maria Grabar and Vladimir Soldatkin

MOSCOW (Reuters) - Russian state gas producer Gazprom <GAZP.MM> posted on Friday a third-quarter net profit of 212 billion roubles (2.6 billion pounds), down 45% from the same period a year ago on lower export volumes and weaker gas prices in its core European market.

Gazprom is set to start up its major Power of Siberia gas pipeline to China next week that aims to deliver 38 billion cubic metres (bcm) of gas a year by 2025.

The firm is set to supply 5 bcm next year, 10 bcm in 2021 and 15 bcm in 2022, a Gazprom official said, adding China must buy at least 85% of these volumes based on the supply contract.

Gazprom expects annual exports to Europe to be around 194-204 bcm in the next four to five years, compared with 198 bcm this year.

It said on Friday it had supplied 53.5 bcm to Europe and destinations other than Russia and the ex-Soviet Union in the third quarter, down from 56.9 bcm in the same period a year ago.

Gross revenue from gas supplies to Europe and destinations excluding Russia and ex-Soviet states was 587 billion roubles, down 37% year on year, as average gas prices fell to $169.8 per 1,000 cubic metres (cm) from $250.8 per 1,000 cm in the third quarter of 2018.

Gazprom said total sales were 1.6 trillion roubles in the third quarter, down from 1.9 trillion in the same period a year ago. Net debt was 2.86 trillion roubles at the end of September.

(Additional reporting by Andrey Kuzmin; Writing by Tom Balmforth and Katya Golubkova; Editing by David Evans and Edmund Blair)