Gazprom Aims for 15% of Global LNG Market with 'Look-to-the-East'

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Johannesburg, South Africa)--Pursuing Russia's "Look-to-the-East" strategy, the major state-owned energy company Gazprom OAO (Moscow) is planning to control 15% of the global LNG market. Currently, it supplies only 5% of global LNG.

Falling demand in Europe and increasing domestic competition has shifted its market focus, according to ceo Alexei Miller, who said that Gazprom signed major long-term supply contracts with South Korea and India in 2012. The company is also expanding production targets in line with the market expansion scenario. A large LNG processing plant with an annual capacity of 15 million tons will come online in 2018 near Russia's far-eastern port of Vladivostok. A similar plant is planned for the Baltic Sea coast to support European demand.

Domestic competition is coming from Novateck (Tarko-Sale, Russia) and oil major, Rosneft (Moscow). The latter's objective is to become Russia's largest energy company, a position that Gazprom currently holds, due to its being Russia's largest taxpayer (at $58 billion annually) with Rosneft behind at $52 billion.

For related information, see June 25, 2013, article - Gazprom Announces Talks with JGC on Vladivostok LNG Project, and March 22, 2013, article - Gazprom Positions New Vladivostok LNG Plant to Supply Booming Asian Market.

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