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Gazprom's low cash flow, high spending

Russia's gas behemoth continues to sink money into projects of dubious value

Gazprom seems hell-bent on focusing on "value-destructive" investment projects rather than complying with a Kremlin decree to raise dividends, investment analysts say. The latest plan to cause dismay amongst investors is a $1bn expansion of the Sakhalin-Khabarovsk-Vladivostok (SKhV) gas pipeline. Gazprom built the original pipeline in 2011 to transport natural gas to China and other Asian markets via Vladivostok. The company claims the expansion is required for the provision of future gas deliveries to customers in the Far East, deliveries for the planned Far East Petrochemical Complex (Fepco) and a fertilizer production plant near Vladivostok. But analysts say the project will barely be

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