Alexei Miller: We have 100 percent fulfilment of our contractual obligations. This year, Gazprom will export a total of around 151 billion cubic metres of gas.
Vladimir Putin: That’s a little less than last year?
Alexei Miller: It’s more than last year. We are seeing very good growth in demand for gas in Europe. Consumption is on the increase there and we forecast an annual increase in demand of 3 billion – 4 billion cubic metres and perhaps even more.
Vladimir Putin: 151 billion tons go to the export market, but how much is supplied to the domestic market?
Alexei Miller: The domestic market is bigger – 290 billion cubic metres of gas.
Vladimir Putin: Twice as big as the export market?
Alexei Miller: Yes, that’s right.
Vladimir Putin: Let’s come back to structural projects.
Alexei Miller: As a global company, Gazprom has a global strategy of diversifying its transport routes in accordance with market demand, above all in our traditional markets.
Europe is our principal market. This was the case in the past and it remains so today. In accordance with the increased demand we are seeing in northern Europe, we are now carrying out a major project – the construction of the North European Gas Pipeline. This is one of the biggest investment projects currently underway in Europe. Construction has already begun on the land-based section of the pipeline and construction of the undersea section will begin in 2007. Gas will be delivered through the pipeline to Germany in 2010. Work is going ahead strictly to schedule and there is no doubt that we will complete the project within the planned deadline.
Vladimir Putin: Have you settled the environmental problems?
Alexei Miller: We are settling all these issues. We are working very closely with all the Baltic region countries and we see that the environmental concerns raised by the pipeline project are now being resolved. We will, of course, take into account all the environmental safety requirements for the construction of an undersea pipeline such as this.
Vladimir Putin: You need to look at the possibility of building a branch pipeline to deliver gas to Kaliningrad Region.
Alexei Miller: Yes, we will do this.
Vladimir Putin: What about new routes to southern markets?
Alexei Miller: Regarding transport routes to other markets, we have begun studying the possibility of building new gas transport capacity to deliver gas to southern markets, in particular Turkey, Greece and Italy. This would also concern European countries such as Bulgaria, Romania, Hungary and Austria. We are looking at the possibility of building a new pipeline, Blue Stream 2, which would increase gas transport capacity via the Black Sea.
Turkey is not currently a transit country for Russian gas. We deliver gas to Turkey, but we see that demand is rising in countries such as Greece and Italy, and so we are working on projects to increase gas supplies to these three markets. We are currently engaged in talks with our Italian and Greek partners. We are also looking at the possibility of increasing gas supplies to Romania, Hungary and Bulgaria and we have established a project company together with MOL to work on this option. This company will carry out the feasibility studies for this route during the course of this year. We are also examining the possibility of building a gas pipeline to deliver gas to Israel. This would be an undersea pipeline taking gas from Turkish territory to Israel. We expect the Israelis to make a final decision very soon on their possibilities for buying Russian gas.
Another big project Gazprom is currently working on is the Altai Project. We are currently carrying out the investment feasibility studies and are holding commercial talks with our Chinese partners. We expect these talks to be completed by the end of the year, and then we will agree on the basic contract terms for gas supplies to China.