OREANDA-NEWS. May 18, 2009. The Board addressed the progress in Gazprom Strategy for Liquefied Natural Gas (LNG) Production and Supply.

The Management Committee was tasked to ensure the Strategy’s development in the aim of consolidating the position of Gazprom Group in the global natural gas market, diversifying export routes and ensuring supply security.

Background:

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 grow by 37.5 per cent up to 327 million tons 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 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 2009 the amount of LNG sold by Gazprom Group totaled around 2 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. Within the first phase of the project it is scheduled to annually supply some 10 billion cubic meters of LNG. At present, the efforts are taken to provide the project with the required infrastructure. In particular, the work is done to gain access to regasification facilities and create a tanker fleet to be used by Gazprom on a leasehold basis. For instance, the prototype vessel parameters and shipyard and shipowner selection criteria have been identified. It is projected that Russian shipping companies with a track record in holding and operating LNG carrier will participate in the shipowner selection process equally with their foreign counterparts.

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.