Norwegian share

The British “granddaughter” of Gazprom is expanding its geography

The British company Gazprom Marketing & Trading (a 100 percent “granddaughter” of Gazprom) entered into an annual gas purchase contract with the Norwegian Hydro. Deliveries will begin on October 1, immediately after the commissioning of the new undersea gas pipeline from Norway to the UK - Langeled. During the contract period it is planned to supply 500 million cubic meters. Currently, the bulk of the gas that GM&T sells on the islands comes from Belgium via the Interconnector gas pipeline. The company purchases part of its gas through spot trading directly in the UK. The deal with Hydro allows it to diversify its procurement portfolio. In total, last year GM&T sold 4.5 billion cubic meters of gas, and by 2010 plans to increase sales by 10-11 billion cubic meters (10% of the country's total consumption).

The British market is the most liberalized in Europe and the most attractive for suppliers. Over the past five years, due to a decline in its own production in the North Sea (by 20%), the UK has turned from a net exporter of gas into a major buyer of blue fuel. And in the last two years, during the winter months, consumers on the islands have fully experienced what a gas shortage is like. Prices increased five to seven times (in some periods they exceeded $1,200 per thousand cubic meters), and many productions were simply suspended. The coming winter, despite the planned commissioning of new gas transmission capacities (in addition to the pipeline from Norway, the expansion of the Interconnector capacity and the launch of the BBL gas pipeline from the Netherlands are planned), London also seems to be quite tense (see Vremya Novostey on August 24) .

According to a press release from Hydro, the gas will be transported via the southern section of the Langeled gas pipeline from the Sleipner field in the North Sea to Easington on the UK's east coast, which will be launched in October this year. The northern part of the pipeline, which will be completed in October 2007, will transport gas to the UK market from the large Ormen Lange field.

“We have always been a stable supplier of gas to the UK market and will increase the volume of gas supplied in the coming years,” Jorgen Rostrup, senior vice president of the Norwegian company, is quoted in the press release. -- Since 2001, Hydro has doubled gas production, from approximately 5 to 10 billion cubic meters. Production from our fields continues to increase and we expect it to reach 16 billion cubic meters in 2010 when Ormen Lange reaches production targets.”

Chief Executive Officer of Gazprom Marketing & Trading Vitaly Vasiliev said he was pleased with “the agreement with such a strong and deeply respected partner as Hydro” as Gazprom’s British “granddaughter” “continues to optimize the portfolio in the interests of its consumers.”

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Gazprom may begin spot supplies of liquefied natural gas (LNG) to South Korea , the Gazprom press service reported following a meeting between Gazprom Chairman of the Board Alexey Miller and President and Chief Executive Officer of the Korean gas corporation Kogas Lee Soo held yesterday in Moscow -Ho. “The parties agreed to consider the possibility of organizing spot supplies of LNG to Korea, taking into account the experience accumulated by Gazprom in this area,” the statement said. The parties also discussed issues related to the organization of supplies of pipeline gas from Russia, as well as liquefied and compressed natural gas to Korea. Another topic of discussion was cooperation in organizing the production of synthetic liquid fuels in Russia and scientific and technical cooperation. Gg. Miller and Lee Su-Ho discussed the progress of preparations for the upcoming signing of an intergovernmental agreement on gas supplies to Korea. Kogas, the world's largest LNG importer, owns three LNG terminals. Today, the Korean gas market is almost entirely dependent on LNG imports. Last month, Gazprom organized the first supply of LNG to Japan. Gas purchased from Mitsubishi Corporation was supplied to Chubu Electric Power Co., Inc. INTERFAX-AGI

Alexey GRIVACHS