Gazprom has reported record jumps to its top and bottom lines in its consolidated financial statement for 2021, shrugging off the decline of gas shipments to its core export markets in Europe.

The Russian state-controlled giant’s swelling accounts are mainly the result of better sales prices.

The average price of Russian pipeline gas in Europe topped $517 per 1000 cubic metres in the fourth quarter of the last year against the 12-month average of $298 per 1000 cbm for the whole of 2021, Gazprom said.

Last year’s revenues were over 10.2 trillion rubles ($136 billion), more than 62% above the previous year’s level.

The gas giant’s 2021 net income was unusually high at almost 2.1 trillion rubles against a meagre 135 billion rubles in 2020.

Net profit for the fourth quarter of the last year was reported at 543 billion rubles as European spot gas prices repeatedly hit $2000 per 1000 cbm.

However, Gazprom resolved to put its record profits into bank accounts instead of reducing its debt, apparently to retain spare liquidity to deal with possible interruptions of its export supplies to Europe and to support its less profitable domestic operations.

Free cash and equivalents had risen to 2.2 trillion rubles by end of the last year. However, the company’s long-term debt had fallen just marginally to about 4.2 trillion rubles by 31 December 2021.

Earlier this week, Gazprom said it has halted gas sales to Poland and Bulgaria after customers in both countries rejected an ultimatum from Moscow to convert their payments from euros and US dollars into rubles using Gazprombank in Moscow.

Current long-term contracts between Gazprom’s export subsidiary Gazprom Export and European customers reportedly envisage most payments in euros and US dollars to be sent to accounts in a Luxembourg-based subsidiary of Gazprombank.

Russian President Vladimir Putin ordered Gazprom to push European customers into a new scheme at the end of March in an apparent attempt to support the Russian banking system that has been hit by tough US and European sanctions following the invasion of Ukraine.

Speaking earlier this week in Moscow, Putin’s spokesman Dmitry Peskov said Gazprom would halt gas deliveries to customers in other European countries if they fail to accept the new payment terms before their payments for April gas supplies are due.

According to Bloomberg, about 10 customers of Gazprom in Germany, Austria, Hungary and Slovakia have complied with the new terms by opening special accounts in euros and rubles with Gazprombank earlier this month.

But on Thursday, officials from the European Commission indicated that by accepting the new payment scheme, customers will be in breach of the sanctions imposed against the Russian central bank.

The sanctions are intended to hamper the Kremlin’s ability to bankroll the war in Ukraine.

European Union energy ministers are scheduled to meet early next week to discuss the situation and provide more clear guidance on what type of payments to Gazprombank and conditions agreed will be considered as violation of the current sanctions.

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