#12 - JRL 7210
Russian gas giant chief executive maps strategy at World Gas Congress
Source: Interfax news agency, Moscow, in English 1110 gmt 4 Jun 03

The chief executive of the Russian gas giant Gazprom, Aleksey Miller, has been giving details of the company's strategy at the 22nd World Gas Congress in Tokyo. According to Russian news agency Interfax, Miller put diversification at the top of the company's agenda and gave an optimistic forecast for its prospects based on "the largest gas reserves in the world, a developed gas transportation network and a portfolio of long-term export contracts". The following is the text of the report in English by Interfax on 4 June:

Moscow, 4 June: Gazprom's main strategy will be to diversify its resource base, sales markets, transport routes and means of processing gas, Gazprom CEO Aleksey Miller said at the 22nd World Gas Congress in Tokyo on Wednesday [4 June].

He said that natural gas is capable of occupying a leading position on the structure of world energy consumption in the next decade and to keep this position until the end of the current century. "Russia should play a leading role in this process," he said.

Speaking about the Russian resource base and its development, the Gazprom chief noted that it would be replenished by the launch of new fields in the Nadym-Pur-Tazovskiy region of Western Siberia. "This will remain the main area of production with volumes of 440bn-445bn cubic metres per annum by 2010," Miller said.

Among other projects to expand the resource base, Miller noted the development of fields on the Yamal Peninsula, with proven onshore reserves of over 10,000bn cubic metres of gas, and also the development of gas fields off the country's north coast - particularly the Shtokman field. It is planned that by 2020 production on the Yamal Peninsula will reach 180bn-190bn cubic metres per annum.

Miller noted in particular the significance of reserves in Eastern Siberia and the Far East, including off the Sakhalin coast with total proven and probable reserves of 6,500bn cubic metres of gas.

In total, by 2020 gas production here may reach 110bn cubic metres per annum, which will make this region a new gas centre in the country. Gazprom has been authorized by the Russian government to become the coordinator of a project to set up a unified production, transportation and export system in Eastern Siberia and the Far East, Miller said.

Regarding sales markets for Russian gas, the Gazprom chief noted that the Russian domestic market is of key significance for the company and the main potential here is connected with the gradual liberalization of this market.

Europe is also an important export destination for Gazprom from the point of view of business development. "In the recent past the share of Russian gas in European consumption has reached 28 per cent," Miller noted.

A priority area for the company is also entering the markets of countries in the Asia-Pacific region, which is seen as a possibility to really diversify gas sales. "We are interested both in gas exports and in joint projects to explore, produce and transport gas. Examples of this approach include Gazprom's participation in the West-East gas pipeline project and also in projects to carry out offshore exploration work in this region," Miller said.

He said that the USA might become an important Russian energy partner. "The possibility is being considered of supplying liquefied natural gas to the US market," he said.

Summing up, Miller noted "Gazprom's base of the largest gas reserves in the world, a developed gas transportation network and a portfolio of long-term export contracts" makes it possible to forecast with certainty that Gazprom will remain a leader in the Russian fuel and energy complex and on the Eurasian gas market.