Alexei Miller: I would like to outline Gazprom’s plans for next year. We plan to increase Russian gas supplies to Western Europe to 145 cubic metres a year. Other plans include Gazprom’s prospective entry to new markets in Europe, Asia, North America and Latin America and preparations for the construction of the North-European gas pipeline along the Baltic Sea bed. Construction of this pipeline route will create a new gas transport route for taking Russian gas to our principle market – the European market.
President Vladimir Putin: Excellent. What plans does Gazprom have to extend the gas network in the Russian regions?
Alexei Miller: We have stepped up the pace of work to extend the gas network in the Russian regions over the last years. We have signed agreements with all the regions and are drawing up gas network development programmes. Over the last two years we have doubled the pace of gas network development work. Our priority attention has gone to regions that have a below average level of gas network connection. On average, 52 percent of the country is connected to the gas network, and our priority, of course, is to develop the network in regions where there are still, unfortunately, insufficient gas supplies for the population.
Vladimir Putin: How much gas overall goes to the export market and how much goes to the domestic market?
Alexei Miller: The ratio is one to two at present, in other words, twice as much gas goes to the domestic market as to the markets in Western Europe.
Vladimir Putin: Won’t this balance be altered if export sales are increased next year?
Alexei Miller: No, this balance won’t be altered because the company is increasing its gas production. Gazprom has set itself new targets and we plan to increase gas production even more next year. The company has set a production target of 547 billion cubic metres of gas.
Vladimir Putin: I would like to point out that we must, of course, think above all of our own country and economy. I understand that the difference in prices on the external and domestic markets makes it more profitable for the company to sell its gas abroad, and this is essentially what is keeping the company afloat, considering that we have still not reached the same level of profitability on the domestic market. But we do need nonetheless to develop our own gas network, especially by connecting households. And as the domestic market becomes more attractive, we need to move in the future towards increasing sales on the domestic market.
Alexei Miller: Gazprom also places a lot of attention on related sectors, in particular the gas- and petrochemicals sector, and in this respect we are working actively on creating new consumers for our gas in industrial sectors here in Russia.
Vladimir Putin: Is the project to build a gas pipeline along the Baltic Sea bed moving ahead? Who are our main partners in this?
Alexei Millier: We are currently looking at a group of German companies as our main partners and negotiations are now nearing completion. Many foreign companies and banks are showing an interest in this project and we plan to reach an investment decision at the beginning of next year and settle on the final group of partners and the financial scheme for carrying out the project. We will also take a final decision on the gas pipeline’s design capacity.
Vladimir Putin: What is the approximate investment involved?
Alexei Miller: It comes to about $3 billion for the actual section of the pipeline to be laid on the Baltic Sea bed, but total investment in the project, that is, taking the pipeline from Russia all the way to Britain, is estimated to come to $5.5 billion.