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. Last Updated: 07/27/2016

Gazprom Export Sales Soar by 43% in 2006

ReutersAlexander Medvedev on Wednesday
Gas monopoly Gazprom's export revenues soared 43 percent and hit a record $37.2 billion in 2006 as it sold more gas at higher prices to over 20 European countries, its export chief said Wednesday.

"We have fully met our export plans despite unusually warm weather in Europe," Alexander Medvedev, Gazprom's deputy CEO and head of its export arm Gazexport, told reporters.

"Be prepared for another record," he said, answering a question about export sales in 2007.

Gazprom, which supplies one-quarter of Europe's gas, sold 155.6 billion cubic meters of its own gas and that of third parties in Europe, up from 154.3 bcm in 2005, he said.

Gas export prices fluctuate together with oil and refined products prices with a lag of six to nine months.

Medvedev also said Gazprom's capital expenditure plans would fully cover its production needs, enabling it to meet demand in Europe as well as supplying enough gas to China in the future.

He said Gazprom was not planning immediate purchases in the United States, such as gas terminals, as it first wanted to start producing liquefied natural gas, or LNG, of its own.

China and LNG are at the core of Gazprom's strategy of becoming a truly global diversified energy player.

Medvedev said he hoped to conclude commercial talks with China by the end of 2007.

On the LNG front, Medvedev said Gazprom would continue studying options for the Shtokman gas field in the Barents Sea and plans for an LNG facility on the Baltic Sea.

Medvedev said Gazprom was considering increasing the capacity of Sakhalin-2 -- in which it will gain a 50 percent stake this year and which has already presold most of its output to China, South Korea and the United States -- by bringing gas from the neighboring ExxonMobil-led Sakhalin-1 project, which is exempted by law from Gazprom's monopoly over Russian exports.

"Sakhalin-1 is a potential source of additional gas for Sakhalin-2. ... The law does not specify what gas exports are. Gas can be sold at the wellhead or at the border," he said.