A rise in gas prices and sales resulted in a welcome boost in profits for Russia’s gas producing giant, Gazprom last year.

The company, which is the world’s largest gas producer, reported profits of 743 billion roubles last year, which is equal to US$22.5 billion. However, this was still short of analyst’s expectations.

A statement from Gazprom attributed the increases to higher European sales and increased prices. ‘This increase was primarily due to the increase in the volume of gas sold to Europe and other countries and higher gas prices in all geographical segments.’

Sales increased 45% over last year, but started to slow towards the end of the year as the economy started to struggle. With this in mind the firm says 2009 will be a much tougher year. It warned, “the negative macroeconomic background characterised by the slump in global oil prices in the second half of 2008 and an ongoing decrease in demand for fuel will have a significant impact on the group’s financial results in 2009.”

Gazprom is controlled by the Russian Government and is the largest company in Russia.