© Reuters.
Russian energy giant Gazprom (MCX:) is developing a comprehensive gas distribution strategy for Kazakhstan and Uzbekistan, according to Alexander Sternik from the Russian Foreign Ministry. The plan, which was still in progress as of Wednesday, involves modernizing the Central Asia – Center pipeline with advanced Russian technologies. This move aims to leverage reverse gas pumping from Kazakhstan to Uzbekistan, addressing the growing energy needs of these rapidly evolving economies.
The initiative aligns with Gazprom’s 15-year cooperative venture, which seeks to broaden partnerships with Kazakhstan, Uzbekistan, and Kyrgyzstan. This development comes after Gazprom began gas routing to Uzbekistan via Kazakhstan on October 7th, 2023, in response to an energy shortfall during the colder months.
As part of a two-year agreement, Gazprom assured a daily supply of 9 million cubic meters of gas, translating to an annual volume of 2.8 billion cubic meters. Sternik revealed these plans while speaking to Federal state unitary enterprise RAMI “RIA Novosti”, indicating that Gazprom’s initiative has received support from the Commonwealth of Independent States Ministry of Foreign Affairs.
The modernization effort is expected to breathe new life into the Soviet-era “Middle Asia – the Center” gas pipeline system through reverse pumping and front-line applications. This approach is expected to significantly enhance the capacity and efficiency of gas supply routes to these emerging economies.
InvestingPro Insights
As Gazprom (GAZP) strategizes its gas distribution for Kazakhstan and Uzbekistan, it’s essential to consider some key InvestingPro Tips and data. Gazprom is a prominent player in the Oil, Gas & Consumable Fuels industry, and it has been profitable over the last twelve months as of Q4 2022. Additionally, the company’s liquid assets exceed its short-term obligations, indicating a healthy financial standing.
InvestingPro data further paints an impressive picture of Gazprom’s financial health. The company’s market cap stands at $43191.17M, with a low P/E ratio of 3.32 as of Q4 2022. This low earnings multiple suggests that Gazprom’s shares may be undervalued. Furthermore, the company’s gross profit margin for the last twelve months as of Q4 2022 was an impressive 76.02%, further indicating its robust profitability.
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