Headed by Alexander Ananenkov, Deputy Chairman of Gazprom Management Committee, the Company’s delegation continues its business trip to Saint Petersburg.

As part of the trip a visiting meeting of the Coordinating Committee for liquefied natural gas (LNG) and compressed natural gas (CNG) production and marine transportation took place under the chairmanship of Alexander Ananenkov, Deputy Chairman of Gazprom Management Committee, Head of the Coordinating Committee.

Taking part in the meeting were Oleg Aksyutin, Member of the Management Committee – Head of the Gas Transportation, Underground Storage and Utilization Department, Yaroslav Golko, Member of the Management Committee – Head of the Investment and Construction Department, Vasily Podyuk, Member of the Management Committee – Head of the Gas, Gas Condensate and Oil Production Department, as well as heads and specialists from Gazprom specialized subdivisions and subsidiary companies – Gazprom dobycha shelf,  Gazprom export, Gazflot, Giprospetsgaz, Shtokman Development AG, Gazprom VNIIGAZ and TsKBN of Gazprom.

The domestic machine-building, shipbuilding and research enterprises were represented by heads and specialists from Volgogradneftemash Geliymash Science and Production Association, Cryogenmash, United Shipbuilding Corporation, Admiralty Shipyards, Amur Shipbuilding Plant, Baltiysky Zavod, Vyborg Shipyard, Zvezdochka Shiprepairing Center, Severnoye Machine-Building Enterprise (Sevmash), Severnaya Verf, Power Machines, Central Economics and Mathematics Institute of Russian Academy of Sciences, Krylov Shipbuilding Research Institute etc.

The meeting addressed Gazprom’s strategic plans relevant to LNG and CNG production, including in the Far East of Russia as well as readiness of domestic enterprises to supply the equipment necessary for LNG and CNG production and marine transportation in the required volumes.

It was noted that the capabilities of Russian shipbuilders in terms of modern methane carriers production were yet unable to meet Gazprom’s demands

“Comprehensive practices prove that the most efficient marine transportation of LNG is ensured by carriers with the storage capacity exceeding 200 thousand cubic meters. By now, Russian enterprises are unable to produce tankers with such parameters. To achieve this goal they have to re-construct their production capacities.

Reduction of foreign components utilization during vessels and LNG plants production and their replacement by the domestic analogues is another important task.

However, Gazprom is ready to order not only tankers and auxiliary vessels from domestic enterprises, but also pipes, stop valves, gas liquefaction equipment etc. when implementing the strategic plans on LNG production. Russian companies are facing the task of turning out, within the shortest time possible, LNG production and transportation equipment meeting Gazprom’s demands. We should make sure that as many Russian enterprises (Gazprom’s current and potential suppliers) as possible could manage this problem. It is very essential to develop the Russian technology for LNG production over the next few years,” stated Alexander Ananenkov.

Based on the meeting results the Committee gave assignments to coordinate the efforts of Russian producers in expanding and upgrading production for the purpose of increasing the share of high-tech domestic equipment and spare parts in ready-made products meeting Gazprom requirements.

Background:

In 2008 the LNG market hit a record high of 172.3 million tons (237.8 billion cubic meters). Its share in the international gas trade totaled 29 per cent. By 2015 the worldwide LNG demand is forecasted to increase by 37.5 per cent up to 327 million tons per annum due to the increased demand for natural gas in the Atlantic basin countries and primarily in the USA.

In order to retain the leading positions in the global gas market, Gazprom is implementing the Strategy for the Liquefied Natural Gas Production and Supply. The Strategy particularly stipulates the actions to be taken in the following key areas:

- Commercial activities development.

From 2005 to 2009 the amount of LNG sold by Gazprom Group totaled nearly 2 billion cubic meters. The Sakhalin II project will play a key role in the further development of this kind of business. Within the project Gazprom started its first Russian LNG deliveries. In the short term the project will enable the Company to significantly expand its presence in the LNG market.

In addition, maximization of profit from LNG trade and retention of control over LNG flows require Gazprom's presence in the markets of ultimate LNG consumers that may be ensured through access to the gas marketing sector and the respective regasification capacities.

- Long-term goals achievement.

Gazprom is active in implementing the Shtokman field development project aimed at ensuring in the long term uninterrupted LNG supplies to the target markets (North America and Asia-Pacific region) and fortifying the Company’s positions in the LNG trade segment. During the first phase of the project it is planned to supply 7.5 mln t of LNG per year. At present, the efforts are being taken to provide the project with the required infrastructure. In particular, the work is being done to gain access to regasification facilities and create a tanker fleet to be used by Gazprom on a leasehold basis. Thus, the parameters of prototype tanker as well as measures for shipyards and owners are in process of formation. It is planned that Russian shipping companies having the experience in the area of tankers management will participate in tenders along with foreign companies.

Among the long-term objectives of Gazprom are entry into international projects for acquisition or purchase of gas which subsequently may be used for LNG production and export. This work is important for enhancing the scope of LNG trading operations and compiling a diversified contract portfolio.

The Coordinating Committee of Gazprom for production and sea transportation of LNF and CNG

The Coordinating Committee for liquefied natural gas and compressed natural gas production and marine transportation was formed in 2003.