Gazprom seeks role in US LNG market

Angel White
Associate Editor

HOUSTON, Dec. 7 -- Russia's Gazprom hopes to become a "serious player" in the US LNG market, said Deputy Chairman Alexander Medvedev.

With the anticipated amount of LNG to be produced in Russia after 2015, the company can "play a substantial role in the North American market," Medvedev said at a Dec. 1 press conference.

These statements follow Gazprom's recent decision to develop giant Shtokman gas-condensate field in the Barents Sea without foreign partners and to pipe the gas to Europe rather than liquefy it for North America as had been planned (OGJ, Oct. 16, 2006, p. 20).

"Before the first LNG train will begin producing LNG in Russia," Medvedev said, "[Gazprom] will require experience in handling LNG cargoes from different parts of the world."

Medvedev said Gazprom will open a Houston office primarily to handle gas quality issues.

The office also will study the US market as Gazprom "would like to be represented as a marketer of natural gas in US." The company is considering joint ventures and asset acquisitions, Medvedev said, including upstream projects.

Infrastructure
Responding to a question, Medvedev said, "Ownership of infrastructure is a key to the market" in North America.

He added, "[Gazprom], as a responsible supplier, wishes not just to produce or to leave product somewhere in the middle between producer and consumer but to be as close to the consumers to meet the need of the consumers."

Gazprom has been applying the strategy in Europe. On Nov. 24 it launched Gazprom Marketing & Trading France (GM&T France) in Paris to develop an upstream-to-downstream natural gas export strategy. Describing France as "a strategic market," the company said it intends to sell gas directly to consumers rather than through wholesalers. GM&T France seeks access to transport networks and infrastructure to deliver gas directly to end-users. Medvedev said Gazprom would acquire local companies and set up joint ventures for this purpose (OGJ, Online, Nov. 27, 2006).

In addition, Gazprom and Eni SPA have signed a new gas distribution agreement, enabling the Russian state-controlled gas giant to sell gas directly to Italian consumers (OGJ Online, Nov. 15, 2006).

Contact Angel White at angelw@ogjonline.com.

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