OREANDA-NEWS. November 24, 2010. The Board of Directors addressed the information on the action plan to consolidate Gazprom's positions in the markets of Europe, Asia and North America as well as on the plans to enter new markets.

The Gazprom Management Committee was tasked to arrange the ongoing work:
—  to strengthen the Company's position in exporting its products to the European and other international markets by increasing the competitive capacity of Russian gas in the current market environment;
—  to enter new markets as part of geographical diversification of supplies as well as to arrange pipeline gas export to Asia-Pacific;
—  to raise the share of liquefied natural gas (LNG) in export supplies of Russian gas;
—  to provide for timely implementation of the Shtokman project, to expand gas liquefaction capacities in Russia's Far East as well as to select promising international LNG projects for participation or obtaining rights to product sales.

The Company's Management Committee was tasked to report on the progress in the program implementation in the 4th quarter of 2011.
Background

The action plan to consolidate Gazprom's positions in the markets of Europe, Asia and North America as well as plans to enter new markets envisage several steps to be taken, in particular:

I. Strengthening positions in the traditional European market

The essential task of Gazprom in Europe is to maintain the system of long-term contracts and price pegging to oil and petroleum products. This system provides for the normal investment cycle in the gas industry. In 2010 Gazprom demonstrated flexibility in relations with its partners and, considering the European gas market situation, temporarily adjusted the long-term contracts to current conditions. Gazprom is planning to offset missing volumes as soon as the pre-crisis contractual conditions are restored. It will happen once European gas demand fully recovers.

Moreover, in order to strengthen positions in Europe, it is planned to create new export corridors for pipeline gas – Nord Stream and South Stream. New gas transmission infrastructure is required for satisfying future European demand for additional imported gas.

II. Entering new markets

Gazprom's strategy in strengthening its positions abroad hinges on the activities in the emerging gas consumption markets. Pipeline gas supplies development is primarily targeted at arranging pipeline gas export to Asia-Pacific in order to tackle the challenge of geographical diversification.

Another target Gazprom pursues by entering new markets is the LNG segment development.

LNG is the most flexible instrument for supplies buildup. It enables to cover remote regions, gain access to the countries with poor pipeline infrastructure or regions inaccessible for Gazprom's pipeline gas supplies. In this context, the Company considers it extremely important to ensure timely construction of gas liquefaction facilities within the Shtokman project and development of capacities in Russia's Far East.

At the same time, the work is underway to study potential involvement of Gazprom into the economically attractive projects on gas liquefaction abroad.