Gazprom Planning $420 Billion Investments Through 2030

---

Researched by Industrial Info Resources (Sugar Land, Texas). Russia’s state owned gas and energy major Gazprom (DE:GAZ) (Moscow) will spend $420 billion through 2030 to ensure gas supplies for Russia’s domestic market and export demand, said Dmitry Medvedev, Russia’s first deputy prime minister. He said that the cash was available and would be invested at an average of $18 billion per annum.

Joint ventures and asset swap deals would help ensure that Gazprom, the world’s largest gas company could supply the market in full, he told the Vedmosti newspaper. The company was considering possible swap deals with a number of foreign companies including E.ON (NYSE:EON) (Dusseldorf, Germany), BASF (NYSE:BF) (Ludwigshafen, Germany) and BP (NYSE:BP) (London, UK).

Answering criticisms that Gazprom was not investing enough in production and was rather looking for acquisitions, including taking control of the Sakhalin-2 and Kovyta gas projects from Western oil majors, he said that fears of a gas deficit on the Russia market were groundless and that the only gas shortage was for those who wanted to buy gas ‘on the cheap.’

Gazprom supplies 25% of Europe’s gas demand. The company produced 556 billion cubic meters (bcm) of natural gas in 2006 and has plans to raise production output to 940 bcm by 2020. Gazprom charges Western European customers an average of $260 per 1,000 cubic meters of natural gas and has caused tensions by pushing neighboring states like Ukraine and Belarus to pay higher prices. At home domestic price caps are being gradually raised and will more than double to $125 per 1,000 cubic meters for industrial customers by 2011.

Back on the acquisition trail Gazprom is in discussions with Emfesz, Hungary’s largest independent gas wholesaler, to take a 50% stake in the company. Emfesz is planning to build the country’s largest 2,400 MW gas fuelled power plant.

Industrial Info Resources (IIR) provides marketing communication services ranging from industrial database solutions to market forecasting, custom analytics, and specialty promotions that support high-level image campaigns.