Gazprom's Exports Up 11% Outside CIS

Russian giant Gazprom's gas exports to non-Commonwealth of Independent States rose by 11 per cent this year, CEO of Gazprom Alexei Miller has told Russian Prime Minister Vladimir Putin.

"Gazprom will have produced about 520 billion cubic metres of gas by the end of the year," he said in a meeting on Saturday. "Last year we produced around 508 billion. Exports to non-CIS countries will top 151 billion cubic metres, which is almost 11 per cent more than last year. Sales on the CIS market are 48 billion cubic metres and the rest is domestic consumption."

He also told the PM that, despite rising gas prices in Europe, the company's sales had not been affected.

"Prices in Russia are still much lower than in the non-CIS markets," he said. "We have recently registered a steady price growth trend in European countries, our traditional customers. This trend does not affect the scale of sales. Today, wholesale gas prices in Russia are five times lower than those under our long-term gas supply contracts with European countries."

Mr. Miller said that the profits were currently being channelled into gas projects and new transit routes, including pipelines. 

"We are investing the profits in gas transportation projects and new gas transportation capacities.

"By the middle of next year we will put into operation the Bovanenkovo-Ukhta gas pipeline, which will be the world’s most modern network. It will deliver gas from the Bovanenkovo deposit in the Yamal Peninsular to the integrated gas supply network. By the end of 2011 more than 25 billion roubles (approx. €600 million) will have been spent on expanding gas supply areas."

He also told the Prime Minister that Gazprom had begun operations with newly acquired Beltransgaz, which would ensure reliable supply to Belarusian and European customers.

"We have started dovetailing the work of Beltransgaz to the operation of the national integrated gas supply system. Norms and standards of technical equipment and service should be the same as in Gazprom. No doubt, this will result in more reliable gas supplies to Belarus and more distant customers in Europe."

Gazprom acquired a 50 per cent stake from the government of the Republic of Belarus in transit company Beltransgaz in recent weeks. The stake was in addition to its own 50 per cent stake, giving Gazprom 100 per cent ownership of the company.