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. Last Updated: 07/27/2016

Gazprom Wants 10% of U.S. Market by 2014

ReutersAlexander Medvedev, deputy chairman of Gazprom, attending a press briefing in the 24th World Gas Conference in Buenos Aires, Thursday, Oct. 8, 2009.

BUENOS AIRES — Gazprom aims to take a 10 percent share of the U.S. natural gas market within five years, deputy chief executive Alexander Medvedev said on Thursday.

The company plans to expand into the United States as it did in Britain in recent years, Medvedev told reporters.

"We are taking into account different opportunities, but Gazprom marketing operated on the organic growth route in the United Kingdom," he said.

"We are now following the same method in the United States. We know how to work in fully liberalized markets," Medvedev said at a press conference at the World Gas Conference.

The Russian giant plans to use liquefied natural gas from its Sakhalin-2 project to supply U.S. customers and is also looking at swapping pipeline gas in Europe to obtain supplies for the United States.

In the longer term, Gazprom could send LNG from its giant Shtokman field to the United States. The field, which is being developed with France's Total and Norway's StatoilHydro, should begin production in 2015, Medvedev said.

Gazprom's European customers, which sharply cut back gas purchases earlier in the year as the world economy swooned from the global financial crisis, have been stepping up their purchases in recent months.

"Starting from July ... we see that the daily offtake of gas is substantially higher," Medvedev said, adding shipments were up by as much as 30 million cubic meters per day from the low point earlier in the year.

Gazprom has received payment from Ukraine for the gas consumed in September, and Medvedev said if contractual payments continue there will be no problems for European gas supplies this winter.

"We do hope that political factors will not negatively influence [the situation] especially in view of the [Ukrainian] election campaign ... we know that Ukraine has enough hard currency reserves to pay for its gas," Medvedev said.

Disputes between Russia and its neighbors like Ukraine that host the giant pipelines connecting Gazprom with its western European customers have led to significant disruptions of gas supplies in recent years, pushing the issue of gas supply security up the agenda for European energy importers.

Medvedev said Gazprom had enough gas reserves to meet future European needs as well as those of emerging Asian consumers like China.

Gazprom aims to eventually hold a 25 percent share of the world LNG market by 2020, with supplies coming from Sakhalin in the Pacific, fields off the Yamal peninsula in northern Russia and the giant Shtokman field in the Arctic.

The company is also urging Russia to liberalize the domestic gas market, in part to spur on energy efficiency. Russian industrial users are ready to operate in a liberalized market, Medvedev said, although the lingering effects of the economic crisis may deter the government from moving quickly, he admitted.

Medvedev said talks with ExxonMobil over the gas at the Sakhalin-1 project were progressing and he hoped to wrap up a deal to have the gas sold into the domestic Russian network completed soon.