Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Gazprom Says 2004 to Be a Record Year

Gazprom, Europe's biggest natural gas supplier, said 2004 exports may exceed last year's record $16.5 billion as the company increases the amount of gas shipped abroad amid high international fuel prices.

The company expects to sell 153 billion cubic meters of gas to Europe, including gas bought from Central Asia and resold to customers outside the former Soviet Union, up from 140.5 billion cubic meters in 2003, said Alexander Medvedev, general director at Gazexport, Gazprom's fully owned trading unit.

"We are adding Turkmenistan's gas exports this year in addition to shipments from Kazakhstan and Uzbekistan,'' Medvedev said. "We are selling under long-term contracts, but we are also getting ready to work on conditions of liberalized market in Europe.''

Gazprom has said it expects to report 2003 profit rose to a 10-year high after export revenue rose to a record as gas prices reached their highest for a decade. Gazprom gets 80 percent of revenue from shipments abroad because Russia caps domestic gas and power prices.

The Moscow-based producer expects deliveries of its own gas to Europe will rise to 140 billion cubic meters this year, from 133 billion cubic meters, Medvedev said.

The company has contracted to export at least 147 billion cubic meters per year of gas through 2008, Medvedev said.

The producer increased exports to Western Europe to 19.2 billion cubic meters of gas in January and February, compared with 16.7 billion in the same period of 2003. At the same time, gas sales to Eastern Europe fell to 7.1 billion cubic meters from 8 billion because of smaller deliveries to Hungary, Medvedev said.

Gazprom will sell 14 billion cubic meters of the fuel to Turkey this year, compared with 12.5 billion in 2003, Medvedev said. Of this amount, 3 billion cubic meters will be hauled through the Blue Stream pipeline across the Black Sea.

The company aims to sell between 8 billion cubic meters and 10 billion cubic meters of gas to Britain a year, taking as much as one-quarter of the country's market for the fuel, he said.

Gazprom plans to hold rights to ship 4.8 billion cubic meters of gas through Interconnector (U.K.) Ltd., which runs a pipeline linking Britain and mainland Europe, by 2006.

The producer may seek to buy European gas-selling companies, such as parts of the gas business of Hungary's Mol Rt., to increase its presence on the European gas market, he said. Hungary is one of 10 countries scheduled to join the European Union in May.

Next week, Gazprom will hold talks to expand gas storages in Poland, he said.

Poland may want to expand storage facilities after its supplies were cut earlier this year when Gazprom halted shipments through Belarus amid a dispute over prices. Gazprom doesn't expect to cut supplies to Belarus, when a deadline in the dispute expires, after Belarus agreed a new contract to buy 1 billion cubic meters of gas from Russia's Trans Nafta.

Gazprom is owed 35 billion rubles ($1.2 billion) by customers in unpaid bills, or 15 percent less than last year, said deputy CEO Alexander Ryazanov.

Proceeds from gas transit totaled $968 million in 2003. Gazprom this year will haul 100 billion cubic meters of other producers' gas, including 44 billion cubic meters from Central Asia, Ryazanov said.