Management Committee considers implementation of Gazprom’s Strategy to consolidate positions in global LNG market
April 1, 2009 - The Management Committee took notice of the information on measures taken to consolidate the positions of Gazprom in the global LNG market.
For the purpose of diversifying export routes, ensuring supply security and consolidating the Company's leading positions in the international gas market the Management Committee tasked the specialized structural units to continue work aimed at implementing Gazprom's Strategy in the area of liquefied natural gas (LNG) production and supply.
A decision was taken to address the issue of new promising LNG projects at one of the upcoming Management Committee meetings.
"As long as the LNG market globalization is deepening, the transit risks are increasing significantly and risky documents are signed without regard to the interests of Russia, we believe, it is necessary to take a new look at the LNG strategy and analyze the practicability of launching new projects in this area," emphasized Alexey Miller, Chairman of the Management Committee during the meeting.
The issue of consolidating the positions of Gazprom in the global LNG market will be submitted to the Company's Board of Directors for consideration.
In 2008 the LNG market hit a record high of 172.3 million tons (237.8 billion cubic meters). Its share in the international gas trade totaled 29 per cent. By 2015 the worldwide LNG demand is forecasted to reach 327 million tons per annum due to the increased demand for natural gas in the Atlantic basin countries and primarily in the USA.
In order to retain the leading positions in the global gas market, Gazprom is implementing the Strategy for the Liquefied Natural Gas Production and Supply. The Strategy particularly stipulates the actions to be taken in the following key areas:
- Commercial activities development.
From 2005 to 2008 the amount of LNG sold by Gazprom Group totaled 1.84 billion cubic meters. The Sakhalin II project will play a key role in the further development of this kind of business. Within the project Gazprom started its first Russian LNG deliveries. In the short term the project will enable the Company to significantly expand its presence in the LNG market.
In addition, maximization of profit from LNG trade and retention of control over LNG flows require Gazprom's presence in the markets of ultimate LNG consumers that may be ensured through access to the gas marketing sector and the respective regasification capacities.
- Long-term goals achievement.
Gazprom is active in implementing the Shtokman field development project aimed at ensuring in the long term uninterrupted LNG supplies to the target markets (North America and Asia-Pacific region) and fortifying the Company's positions in the LNG trade segment. At present, the efforts are being taken to provide the project with the required infrastructure. In particular, the work is being done to gain access to regasification facilities and create a tanker fleet to be used by Gazprom on a leasehold basis.
Among the long-term objectives of Gazprom are entry into international projects for acquisition or purchase of gas which subsequently may be used for LNG production and export. This work is important for enhancing the scope of LNG trading operations and compiling a diversified contract portfolio.