Gazprom will resume buying gas from independents based on market
MOSCOW. Sept 10 (Interfax) - Gazprom plans to return to the practice of procuring gas from independent producers based on how things are on the market, the first deputy chief of the company's marketing department, Alexander Mikheyev, said during a conference call.
"We will be continuing with the practice of buying gas from independents depending on the situation on the market," Mikheyev said.
"In any case, total transfer of gas by independent producers will be higher this year than last," he said.
"In regards to gas purchases from Central Asian producers, companies in these countries are our strategic partners. We have many important joint projects. Therefore, introducing changes to contracts will be carefully considered and agreed upon with our partners," he said.
The new Bovanenkovskoye field on the Yamal Peninsula will largely compensate for possible decrease in production at Gazprom's older fields. In addition, the independent producers' have several fields where production has peaked, Mikheyev said.
Commenting on gas imports from Central Asia, Gazprom's deputy CEO Alexander Medvedev said that "the situation with each of our partners is special. These aren't just buy and sell relations but something more complex." "Exports of Kazakh gas is done by our joint venture KazRosGaz. Moreover, raw gas from Karachaganak is processed at the Orenburg Gas Processing Plant. We have joint production in Uzbekistan and there are plans to expand this partnership in the future," he said.
Gazprom said earlier it is from today indefinitely suspending the acquisition of gas under its contracts with independent producers because of unstable demand for gas on the domestic market.
Mikheyev said that this measure is necessary to ensure necessary and decent level of gas production by Gazprom. The company said that all gas, which independent producers have contracted to sell to their clients, is being delivered in full measure. The suspension only concerns gas purchased by Gazprom.
Gazprom produced 513 billion cubic meters of gas in 2011 and planned to boost this figure by 3% to 528.6 bcm this year. However, it was already clear by spring that the company was behind plan and the production growth forecast was reduced to 1%-2%. A member of the company's managing committee, Vsevolod Cherepanov, said in the midyear that the plan would not be met and production could even decrease for this year "within 2%". For the first half of 2012, production was 10 bcm short of the plan, or by 2%.
As of September 8, Gazprom's production was 18.6 bcm under last year's schedule.
However, Cherepanov said: "This still doesn't mean that we won't meet this [planned] level of production for this year." In turn, Gazprom CEO Alexei Miller told shareholders that "we've haven't made any revisions of the plans and don't plan to do that." "There are big expectations for the third quarter and we won't forget about the entire winter period of the fourth quarter," Miller said.
Gazprom Mezhregiongaz sold 42 bcm from other producers on the domestic market in 2011. Out of this amount, 17 bcm was from NOVATEK . NOVATEK produced around 53 bcm of gas last year. The head of Gazprom Mezhregiongaz, Kirill Seleznev, said that Gazprom has plans to purchase around 11 bcm of gas from NOVATEK in 2012.
A source a Gazprom said that the plan to purchase gas from NOVATEK has been 100% implemented to date.
It was earlier reported that the purchase of 42 million cubic meters (mcm) of gas a year from NOVATEK would be halted, as well as 27 mcm a day from Lukoil, and 8.6 mcm a day from Sibneftegaz (a joint venture of Itera and NOVATEK).
Lukoil later said that it had successfully reached an agreement with Gazprom to cancel this restriction.
NOVATEK increased gas production in the first half after initially planning to boost output 6%-7%. The company has officially expanded its forecast for production growth to 7%-11% depending on the market situation.
One of the other leading producers of gas in Russia is Rospan, which is part of TNK-BP . The company's annual output comes to around 3 bcm a year. Rospan's gas is sold through TNK-BP and Gazprom Mezhregiongaz's joint venture, Novo-Urengoi Gas Company.
The Gazprom Group's portfolio also includes Central Asian gas, including Turkmen (11.2 bcm of gas in 2011), Uzbek (8 bcm) and Kazakh (12 bcm), at around 100 mcm a day. Gazprom cannot reduce gas collection under these contracts since they are based on a "take or pay" principle.
