News

17 February 2011

Gazprom hosted a day In New York for the participation of company executives

The U.S. market is promising for the company, said Deputy Chairman of Gazprom and Director General of Gazprom Export, Alexander Medvedev at the Investor Day in New York.

Speaking to American business he noted that shale gas production in North America "poses no threat to the business interests of Gazprom”. According to him, “international companies that have established joint ventures with American firms to explore technology on the wave of hype around shale may have invested recklessly. We will not follow such a course and will not enter into such alliances, since Russia already has fracturing technology which was invented in the Soviet Union,” he said. But the company is carefully watching the development of this industry in the U.S. Alexander Medvedev compared the popularity of shale gas production with the Internet "bubble" of the early 2000's. Moreover, in his view, the development of shale gas in North America will have a positive impact on the state of the gas industry in the world.

Alexander Medvedev expressed the view that gas prices in the U.S. will be back to 6-8 dollars per million British thermal units over the next five years: "at prices below this massive shale gas production is impossible. Throughout most of last year, due to the start of production of shale gas, prices on the New York commodity exchange fluctuated below $5 per million British thermal units.” He also said that “Gazprom is ready to supply natural gas to North America, the only condition for the start of deliveries is a good price."

Asked about the timing of the Shtokman project, he said that it would be put into operation in 2017. The company did not see any reason for it to be delayed, he said.

Referring to the consequences of political unrest in the Arab countries, Alexander Medvedev said that Gazprom "was worried by what was happening, but at present the company's projects were being implemented to schedule. We hope that these countries are able to avoid radical events", he concluded.

Deputy Chairman, Chief Financial and economic department of Gazprom, Andrei Kruglov mentioned the possibility of corporate borrowing in RMBs. An RMB option is possible since we are actively working with China and we expect concrete agreements this year," he said.

Andrei Kruglov also confirmed the previous Gazprom Group's statement of its willingness to place eurobonds in rubles. "We are seeing a trend towards strengthening of the ruble, and intend to sell Eurobonds denominated in rubles in the near future, particularly because our investments are made in rubles," he concluded. According to him, the company may also do calculations for natural gas in rubles from Ukraine and Belarus.

Asked about the conjuncture of the gas market, Alexander Medvedev said that Gazprom Group expects the restoration of supply and demand for natural gas over the next two years. By his estimation, the market value of the company will return to its maximum in no later than five years. Over the next 10 years, according to him, "it is absolutely realistic" to assume that it will reach 500 billion U.S. dollars.

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