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. Last Updated: 07/27/2016

Gazprom Sees Asia as Rising Client

Gazprom expects its shipments to Asia eventually to reach the same level as those to Europe, where it has a quarter of the market, chief executive Alexei Miller said.

State-run Gazprom in 2012 will begin building a pipeline that will stretch from the Yakutia region of Siberia through Khabarovsk on the northeastern tip of China to the port of Vladivostok on the Sea of Japan, Miller said in a statement late Wednesday.

Construction of that link will follow one now being built from Sakhalin Island west to the far eastern mainland through Khabarovsk and on to Vladivostok, Miller said.

“Gazprom’s strong resource base in west Siberia and a new gas production center the company is setting up in Russia’s Sakha, or Yakutia, republic will satisfy the future demand for Russian gas from the Asia-Pacific Ocean countries,” he said.

Meanwhile, Gazprom has high hopes for the European market as well, where it hopes that its share of the market will reach 32 percent by 2020, Sergei Komlev, head of contract structuring and price formation at the company, said Thursday. That's up from the 25 percent market share that it currently holds.

Komlev said he doesn’t agree with IEA estimates that European gas demand fell 8 percent last year and said there was a 6.8 percent contraction. The long-term demand outlook is not as “dramatic” and there will be a shortage of 250 billion cubic meters of gas by 2030, he added.

Europe’s own gas production may fall by 60 bcm over the next decade, while demand will rise by 70 bcm, Komlev said. By 2030, aging fields in Europe will reduce output by 80 bcm, and demand will grow by 40 bcm, he said.

The optimistic predictions come after a bad year for gas sales. Russia exported 168.3 bcm of gas in 2009, 13.9 percent less than in 2008, the Economic Development Ministry said in its economic report for 2009, Interfax reported.

Production fell 12.1 percent to 583.6 bcm in 2009, down from 664 bcm the year earlier.

The report attributed the decline to lower demand on the domestic and export markets, high prices for exports in the first half of the year, a failure to consume contracted amounts and disruptions in gas transit.

•Gazprom has scheduled its annual general meeting for June 25, the gas giant said Thursday.

The company has nominated several bankers and academics for seats on the board, whom shareholders will vote for at the meeting. The nominations include: Andrei Akimov, chairman of Gazprombank; Vladimir Gusakov, vice president of MICEX; Alexei Makarov, director of the Russian Academy of Sciences Institute for Energy Research; Viktor Nikolayev, general director, St. Petersburg Exchange; Vlada Rusakova, head of Gazprom's Strategic Development Department; and Vladimir Fortov, head of the Academy of Sciences United Institute for High Temperatures.

(Bloomberg, MT)