Vesti-24 TV Channel

Alexey Miller, Chairman of the Gazprom Management Committee: Perhaps, it is an occasion, but, on the other hand, the fact that the Conference is taking place here, in Argentina, Latin America, is regarded by us as some kind of natural result. Why? Because all the World Gas Conference participants note the rapid pace of the gas market globalization in their speeches and bilateral negotiations, as well as during our bilateral meetings. And we were just comparing the projects we discussed at the World Gas Conference in Amsterdam three years ago with the projects and issues we are discussing today. Three years ago the projects we had discussed in Holland, the Netherlands, were much more local. And this concerns Gazprom in particular. Today, we are speaking of Gazprom as of a global player. In fact, Gazprom carries out its commercial operations worldwide. That’s why I can say that today, in the course of bilateral negotiations, it was rather surprising for us that the Latin American market players posed specific and acute questions on our further cooperation with them and possible new projects in this region.

What do they want? You know that Gazprom is the number one company in the gas business. Our experience is colossal, our scientific basis is extensive. Speaking of the scientific basis, we should understand that it is the first step towards creating general schemes and long-term development plans. The gas sector is considered to be the world’s most capital-intensive industry and it is clear that investments in this industry can be evaluated only within long-term plans and strategies. That’s why Gazprom’s experience, its scientific basis, as well as the market establishment and development practice that we have are in great demand here.

You know, in fact, speaking of our production and geological exploration practice, I can say that it is really unique. We have the largest explored and proven reserves in the world. Nowadays, Gazprom’s balance amounts to 33.1 trillion cubic meters of gas. It is our experts’ and employees’ merit as well. In addition, the fact that we possess such an explored resource base certainly means a lot.

Yes, we can discover a lot here.

Certainly, not only discover, but participate in the development as well and, most importantly, create gas transmission facilities in this region. Gazprom is widely known for the longest gas transmission system in the world. We hold 160,000 kilometers of gas trunklines alone. We have built them all and we are using them. Surely, in this regard, our practice is at the forefront. Moreover, at present we are building the Bovanenkovo – Ukhta pipeline. Undoubtedly and without exaggeration, it is the highest level of the global gas industry. Why? Because gas transportation via this pipeline will be carried out under high pressure. It means absolutely different distances between compressor stations and absolutely different grades of steel used. That’s why we’re speaking of Bovanenkovo – Ukhta as a fundamentally new pipeline, the next-generation pipeline.

As for the mountains, you know that we have recently commissioned the Dzuarikau – Tskhinval gas pipeline. It is the pipeline running at the height of 3,150 meters. There were even suggestions to include it into the Guinness Book of Records. Taking into account that we also implemented Blue Stream – the pipeline project offshore the Black Sea – where the pipeline placement depth reaches 2,150 meters, the operating height range of Gazprom exceeds 5 kilometers.

First of all, I would like to mention Venezuela. We are practically carrying out geological exploration there within a number of projects. We’ve held fruitful talks with our Bolivian counterparts today in furtherance of the Memorandum signed with this country. We see very good prospects for geological exploration and gas production, and perhaps, in future, for gas sales and transmission here.

I would like to say that there is a contract stipulating a gradual gas price increase for Belarus, and it is important to operate in accordance with this contract, to follow its terms.

We hope that Ukraine will continue paying. Speaking of the recent months, we can see that Ukraine follows all the contractual terms and effectuates Russian gas supply payments in full. Therefore, we see that there are no problems between Russia and Ukraine in the gas sector. We also think that Ukraine is able and must effectuate full-scale gas payments for the Russian gas, because this country has money.

According to monthly payouts, Ukraine has money. At the same time, every month our Ukrainian counterparts tell us about the difficulties they face regarding the payouts. But, on the other hand, we see that Ukraine pays in a timely manner, and we are sure that this country will keep on doing it in the future, because Ukraine has financial capacities. NAK Naftogaz Ukrainy is a wholly state-owned company. Nevertheless, we know that Ukraine possesses significant gold and foreign currency reserves, and we know about the credits granted to this country by the International Monetary Fund. We also know that the credits are granted with due consideration of the Russian gas supply payouts. So, the last-month practice shows that Ukraine has money. Ukraine can and, I emphasize, must pay for the gas in compliance with the signed contract.

All the basic gas cooperation agreements with Serbia are already signed. First of all, I am certainly speaking about the South Stream gas pipeline. Gazprom acquired 51 per cent in the Serbian section of the South Stream gas transmission system. We also agreed on the principles, according to which the gas storage projects will be implemented, in particular, the Banatski Dvor project. The agreement was also reached on the purchase of a controlling stake in Naftna Industrija Srbije – Serbian Oil Industry (NIS) company by our subsidiary Gazprom neft. That’s why I can say that the upcoming negotiations and meetings will be devoted to the execution of the principal agreements which were reached. Our relations with Serbia are very good; there is absolute mutual understanding between us. And I can add that the South Stream gas pipeline will open completely new prospects for cooperation in the gas sector and other related areas.

You know, I wouldn’t like to point out some particular countries now whose permits are required to construct the Nord Stream gas pipeline in the national economic zones – they are Finland, Sweden, Denmark, Germany and, of course, Russia. I wouldn’t like to focus attention on specific countries. All I want to say is that the work on obtaining all the approvals is being carried out on schedule, and we are confident in timely implementation of the project. And I think we will obtain all the approvals till the end of 2009.

There was a very fruitful discussion of our cooperation prospects, in particular, we explained to Repsol’s representatives the reasons why they had missed the meeting chaired by the Prime Minister.

No, in fact there was a pure objective criterion for companies to participate in the meeting. These are the companies that are already implementing projects with us including either those that have been or will be implemented in the short run. For instance: Shell is engaged in Sakhalin II, Mitsui and Mitsubishi – in Sakhalin II, Total is engaged in Shtokman, Statoil – in Shtokman, Kogas – in LNG in the Far East and so on. Repsol is a strong player particularly here, on the Latin American market and on the global market in general, but the company has no such projects in Russia yet.

They surely do. If they wish they will actually manage to jump into the train as you have said. But this requires serious preparations to be done prior to the next meeting with the Repsol management, which, in fact, was agreed on with the company’s President. Our experts will study the cooperation fields we have specified. Of course, they primarily involve LNG projects. A regular meeting is to be held in mid-December allowing us, as I believe, to take certain steps.

It’s because of a tremendous concern. And, you know, to mention all other companies that weren’t invited to Yamal, well, in particular, I had negotiations with the President of Petronas today and we touched upon the Yamal LNG issue, inter alia. Great interest is displayed and it is displayed by global players, as well as by those who operate on local markets. But regarding our resource base and long-term prospects, everyone is aware what Russia is and what Gazprom is. Everybody is interested in dealing with us. Everybody comprehends perfectly that the role of Russia and Gazprom will steadily grow. And due to market globalization in parallel with the fact that we actually trade in remote parts of the world at the moment, everybody clearly understands that we could become partners with the companies that haven’t even dreamt or thought about making business with us recently due to impartial reasons.

Well, firstly, one has to mention risk sharing. These are highly capital-intensive and technologically complicated projects and the latter doesn’t mean availability of technologies for ones and their lack for others. Actually, to implement these projects one has to find purely specific, technologically complicated solutions applicable for a specific project. Undoubtedly, it is more convenient to implement such projects jointly and to share risks, especially technological ones.

In fact, you know, financial risks are a bit lower here. Our operating principle, Gazprom’s principle of work is market-based operation. First, we have to sell gas and then we produce and convey it.

No, we haven’t really faced such a problem. On the contrary, I can say we extended our investment program in 2009. The scope of our investment program in 2009 amounted to more than RUB 750 billion that’s equal to USD 25.5 billion. That is higher than the total budget of our investment programs for the three years before the crisis.

But the volumes haven’t. And now we can see that the European market has been featuring growth during the last two months. It’s growing. And during the talks and bilateral contacts at the Conference we noticed that the European market had not just stabilized, moreover, its growth rate had surpassed the one of 2008.

We observe substantial changes in the real economy, mainly in Europe. The same concerns Russia. Ukraine is a specific topic. As for the investment program, we assumed it possible to redistribute our investments from Western Siberia and the Western European part of the country to Eastern Russia. Why? Because we can see the potential in this region of Russia nowadays. We can see the unsatisfied gas demand. In general, if Western Russia had excessive facilities in 2009, Eastern Russia at the same time was short of those with the existing demand on the background. That’s why while adjusting the 2009 investment program we redistributed funds from Western Siberia to the Far East and Eastern Siberia understanding that we may postpone a number of projects in Western Siberia since the facilities allow it, while in Eastern Siberia and the Far East now we have to create infrastructure and establish a gas market. Moreover, we observe an increasing long-term demand for Russian gas shown by the Asia-Pacific countries. The situation is changing. And it is changing swiftly. You know, it started changing rapidly right after we had practically commenced the Sakhalin – Khabarovsk – Vladivostok gas trunkline construction. Once Gazprom put in the construction machinery and started laying pipes into a trench, the essence of negotiations about cooperation with Gazprom and about Russian gas purchase on a long-term basis changed drastically.