Apparently, Gazprom has concluded a good agreement, but it will not free Russia from the need to negotiate with European gas consumers

Did Vladimir Putin benefit from signing the notorious 30-year gas supply contract with China? Absolutely: he demonstrated to Western leaders that he still has strong allies. But did Russia win? This question is somewhat more complicated and requires some calculations.

Let's start with the main thing - the price. Russia and China have not made its formula public, but this is understandable: we do not know what formulas are included in Gazprom’s contracts with the main European buyers. Otherwise, all Gazprom's clients would compare their contracts with their neighbors' and many misunderstandings would arise. Here is the formula for the contract with Ukraine - we know, but this is the result of a leak .

However, the head of Gazprom, Alexey Miller, could not help but hint at the terms of such an important agreement. The arithmetic here is simple: the total amount of the contract, according to him, is $400 billion, the duration is 30 years, the basic volume of supplies is 38 billion cubic meters per year. We get $350 per 1000 cubic meters.

This is slightly lower than the current average export price of Gazprom, which is expected to be $372 this year. And this is almost the same as what China now pays for gas supplied through pipelines from Turkmenistan, Uzbekistan and Myanmar. on this subject There is Platts data , which allows us to calculate the weighted average price of $355.

It is obvious that the Chinese bargained hard: after all, Putin, for geopolitical reasons, desperately needed this agreement, and they had such an opportunity. However, as usual, it was also important for them that the northern guest did not lose face.

And here is the result: the price for Russia is not shameful.

Is it worth the expense? To answer this question, I built a small financial model . The initial conditions for it are as follows. For the construction of the pipeline and development of the Chayandinskoye field in Yakutia, $55 billion is needed, Putin said. Russia will be able to borrow them at approximately 5% - the cost of such borrowing is slightly higher than the yield on Russian dollar government bonds. The cost of production will be $81.4 per 1000 cubic meters, delivery to the border with China will be, say, $73.1, as via the Yamburg-Baumgarten pipeline . As a discount rate, you can use, for example, American inflation - 2% (we count everything in dollars).

Under such conditions, the net present value (NPV) of the project is $86.3 billion. That is, the project, to put it mildly, cannot be called unprofitable.

However, now we need to take taxes into account. Let’s say the mineral extraction tax for the project is zeroed out, which would bring 788 rubles per 1,000 cubic meters to the treasury at 2015 rates. But there is still a 30% export duty on gas. Application of this duty in full in our model would lead to the project being unprofitable: its NPV would be minus $3.1 billion.

Therefore, we can confidently predict that the government will not only reset the mineral extraction tax to zero, but will also reduce the export duty for supplies to China. If we lower it to 20%, the NPV for Gazprom will be $27 billion. The company will receive an additional financial flow of $1.2 billion per year. The NPV for the state will, accordingly, reach more than $59 billion. In addition, the state will receive additional income tax revenues and, possibly, dividends from Gazprom.

It will also collect taxes from Gazprom’s contractors, who will receive that same $55 billion. It is clear that a considerable part of this money will go to the companies of the Rotenberg brothers and Gennady Timchenko, whose positions as Gazprom’s partners are strong while Putin sits in the Kremlin. Not a bad compensation for Western sanctions.

Russian oppositionists are now calling the contract unprofitable. wrote about this Former Deputy Minister of Energy Vladimir Milov and former First Deputy Prime Minister Boris Nemtsov - no matter how you treat them, they are still knowledgeable people in the Russian gas industry. Their argument, however, is too creative - for obvious political reasons. From a business point of view, such a project cannot be abandoned.

Yes, the state will be forced to give Gazprom serious tax breaks so that the contract makes sense to fulfill. But if the deal had not been concluded, then the budget, together with Gazprom, would have lost $86 billion, which they would somehow divide among themselves: after all, their own. Well, additional taxes that I did not take into account in the model should not be discounted either.

No, desperate attempts to show the West nothing from the East will not lead to the collapse of the Putin regime, will not ruin it, on the contrary, it will feed both the treasury and the coffers of the “correct” businessmen. So we can only hope that the diversification of sales markets will not deprive this hydrocarbon regime of any remaining caution. After all, 38 billion cubic meters is only a fifth of current gas exports from Russia.

Most likely, having started supplies to China, Gazprom will subsequently be able to easily increase them: China needs to accelerate the transition from coal to gas, and it will do this closely in the coming years. The dependence of the Russian monopoly on supplies to Europe will thus decrease.

But it will still be impossible to treat traditional clients with disdain: becoming dependent on China is even worse, because although it is big, it is alone.

Gazprom and the Kremlin probably understand that they will still have to improve relations with the Europeans, as well as give in to them in price. Further military adventures will also have a bad effect on trade. And this is an excellent reason to refrain from them.

Chinese contract: who benefits?