Gazprom said today that it would have to import increasing volumes of Central Asian gas to meet its commitments to European customers, but denied that it would struggle to meet growing foreign and domestic demand because of shortfalls in supply.
A spokesman for the Russian energy giant indicated that despite fears over a supply squeeze it intended to increase exports to Britain in coming years and "strengthen its position" in the British market, though he would not be drawn on speculation over takeover bids.
A spokesman for the Russian energy giant indicated that despite fears over a supply squeeze it intended to increase exports to Britain in coming years and "strengthen its position" in the British market, though he would not be drawn on speculation over takeover bids.
"It is clear that with the increase in demand for UK gas imports, our participation in the market will increase," said Sergei Kuprianov, spokesman for deputy chairman Alexei Miller.
Gazprom, which owns one-sixth of the world's natural gas, pipes 30% of its output to Europe and provides around 4% of Britain's gas supply. But there have been growing indications that its declining gas fields and failure to invest in new exploration and production could squeeze output, threatening shortages.
One source close to the company said there were fears of a shortage next year, adding: "The company has lots of contracts with lots of customers in western Europe, Belarus and the UK and has to find new fields to replenish old ones."
Officially, executives insist there is enough gas for everyone: the headline on the latest company monthly magazine is "Khvatit na vsekh" ("There's enough for everyone").
But they want to be able to hike domestic tariffs considerably, as Russian gas prices are lower than the cost of production. Last year, Gazprom lost 8bn rubles (£160m) on its domestic gas business.
"This is not about a shortfall of gas, it's about a shortfall of cheap gas," said Sergei Kuprianov, spokesman for deputy chairman Alexei Miller. "We must get to the point of liberalising gas prices in our country. If we get to a stage of equal prices for domestic and foreign markets it will influence decisions by customers."
Meanwhile, he said, imports of Central Asian gas will grow. From Turkmenistan alone, Gazprom plans to more than double imports over the next four years to as much as 80bn cubic metres - around 14% of its own output.
Professor Jonathan Stern of the Oxford Institute for Energy Studies said central Asian imports were crucial to tide Russia over until new gas fields come on stream in 2015.
Much will also depend, he says, on domestic usage "and as long as prices are like this demand will gallop up."
But he said it was unlikely that President Vladimir Putin would agree to domestic price hikes before the 2008 presidential election.
Mr Kuprianov said Gazprom was looking "at different ways to strengthen our position in the British market" but added that "it wouldn't be right for me to tell you about any deals".
He added that the company was unhappy about the reaction in the west to its expansionary ambitions. Under Mr Putin, the company has emerged as a "national champion" with multiplying domestic and overseas assets.
"We are definitely ambitious in a good sense, but the reaction to our actions is excessively emotional," he said.
Gazprom, which owns one-sixth of the world's natural gas, pipes 30% of its output to Europe and provides around 4% of Britain's gas supply. But there have been growing indications that its declining gas fields and failure to invest in new exploration and production could squeeze output, threatening shortages.
One source close to the company said there were fears of a shortage next year, adding: "The company has lots of contracts with lots of customers in western Europe, Belarus and the UK and has to find new fields to replenish old ones."
Officially, executives insist there is enough gas for everyone: the headline on the latest company monthly magazine is "Khvatit na vsekh" ("There's enough for everyone").
But they want to be able to hike domestic tariffs considerably, as Russian gas prices are lower than the cost of production. Last year, Gazprom lost 8bn rubles (£160m) on its domestic gas business.
"This is not about a shortfall of gas, it's about a shortfall of cheap gas," said Sergei Kuprianov, spokesman for deputy chairman Alexei Miller. "We must get to the point of liberalising gas prices in our country. If we get to a stage of equal prices for domestic and foreign markets it will influence decisions by customers."
Meanwhile, he said, imports of Central Asian gas will grow. From Turkmenistan alone, Gazprom plans to more than double imports over the next four years to as much as 80bn cubic metres - around 14% of its own output.
Professor Jonathan Stern of the Oxford Institute for Energy Studies said central Asian imports were crucial to tide Russia over until new gas fields come on stream in 2015.
Much will also depend, he says, on domestic usage "and as long as prices are like this demand will gallop up."
But he said it was unlikely that President Vladimir Putin would agree to domestic price hikes before the 2008 presidential election.
Mr Kuprianov said Gazprom was looking "at different ways to strengthen our position in the British market" but added that "it wouldn't be right for me to tell you about any deals".
He added that the company was unhappy about the reaction in the west to its expansionary ambitions. Under Mr Putin, the company has emerged as a "national champion" with multiplying domestic and overseas assets.
"We are definitely ambitious in a good sense, but the reaction to our actions is excessively emotional," he said.
Source: The Guardian
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