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Gazprom considers increase in LNG production and supplies

October 17, 2012, 21:03 UTC+3

Board of Directors has reviewed global gas production and consumption scenarios

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MOSCOW, October 17 (Itar-Tass) —— Gazprom’s Board of Directors has reviewed global gas production and consumption scenarios and discussed measures to increase LNG production and supplies to the domestic and foreign markets.

The company's Management Committee has been tasked with preparing proposals on updating the Gazprom LNG Production and Supply Strategy.

According to Gazprom, all international analytical centres, industrial and independent consulting companies expect a steady increase in LNG consumption over the long term. Their forecasts indicate that the global gas demand will grow 1.5–2 percent a year on average, ensuring a 1.4–2 trillion cubic metres increase in consumption by 2035.

The highest rates of growth will be in Asia-Pacific countries, where the average annual consumption rate will reach 3.2–4 percent. The increase of consumption rate in Asian countries will be secured, first of all by India and China. According to the forecasts, 23 percent of the global gas consumption volume increase accrues to China, and by 2030 it will become comparable with the European countries.

The key point of the world market development is the sufficiency of resources to secure the demand in the long run. Currently, the world proven natural gas reserves total 208.4 trillion cubic metres, the bulk of which is in the Middle East (38.4 percent) and in Russia (21.4 percent). Gazprom possesses the largest natural gas reserves in the world (18 percent), which gives the company a significant competitive advantage over other global energy suppliers in the long term, Gazprom said.

Another important trend in the fuel market is the world LNG trade that has reached 25 percent by 2011. It is conditioned upon new importing countries and new LNG sales markets formation. According to IEA, in the next 20 years LNG will ensure more than a half of the interregional gas trade increase and by 2030, will double and total 635 – 745 billion cubic metres a year.

By implementing its LNG Production and Supply Strategy, Gazprom will strengthen its positions of the largest hydrocarbon feedstock supplier in the global gas market. As part of the Strategy, the Company is engaged into the following top-priority activities:

— The company's sales market expansion by increasing LNG volumes on the export portfolio by LNG production and supplies from the Russian Far East and Shtokman project.

— Entering the foreign LNG projects in order to gain rights for final products marketing and Gazprom Group's marketing potential development in the LNG trade sector.

— Development of LNG production and supplies to the domestic market as part of low and medium-tonnage LNG projects, enabling gasification of the remote from the UGSS consumers and develop retail marketing infrastructure of natural gas as motor fuel, the company said.


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