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Gazprom’s LNG market development

LNG Industry,

The Gazprom board of directors has addressed the company’s marketing policy regarding the international markets of small- and large-scale LNG supplies.

LNG sector

It was pointed out that the LNG sector was a flexible means of maximizing Gazprom’s trading portfolio and that the LNG marketing development represented one of the company's core businesses.

Since entering the LNG sector in 2005, Gazprom has sold 148 LNG cargoes to 12 countries, and the company is always looking to expand its operations and build up its supplies.

Sakhalin project

In 2007, Gazprom acquired the majority stake in the Sakhalin II LNG project, under which Russia’s only LNG plant was commissioned in 2009. Through its development of the LNG sector, Gazprom has expanded its range of available markets, and has considerably increased its hydrocarbon export.

Currently, the global LNG market is experiencing a sustainable annual growth in demand by an average of 3%. Most of this growth is being witnessed in the fast-growing Asia-Pacific markets. However, Gazprom is also interested in the emerging markets of South-East Asia, South America and Middle East as well as the European markets beyond Russian gas pipeline supplies.

Global LNG market

After considering the global LNG market, the board of directors decided to focus on marketing gas from new projects, in order to enhance Gazprom’s large-scale LNG business. In particular, the company is looking at possible ways to increase its supplies from the Sakhalin II project, through the addition of a third production train. The LNG plant in Vladivostok has commenced selling gas and the Baltic LNG project is currently under development. A gradual increase in LNG output will allow Gazprom to command a 15% share in the global market by 2030.

Small-scale LNG

Small-scale LNG production and supply is an important component of Gazprom’s LNG marketing policy. Recent global efforts to reduce emissions and optimize fuel costs have resulted in the emergence of LNG as a viable alternative to conventional energy sources. Its use as a vehicle and bunker fuel, and in power and heat generation, offers both economic and environmental advantages.

With a view to promote LNG use as a vehicle fuel, Gazprom is looking to cooperate with major European commercial and private vehicle manufacturers as well as large retail companies with large vehicle fleets. The company is also committed to developing port infrastructure in the regions where LNG is used as marine fuel, in addition to cooperating with the housing and utility sector, small and medium industrial consumers.

Adapted from press release by Katie Woodward

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