| ST PETERSBURG, Russia, June 21
ST PETERSBURG, Russia, June 21 Gazprom
is ready to take on potential Russian and Australian rivals for
Asia's ballooning liquefied natural gas market, its export chief
said after President Vladimir Putin signalled an end to its
exclusive right to export LNG.
Putin said Gazprom's rivals such as Russian company Novatek
, which is building an LNG plant on the Arctic Yamal
peninsula, would gradually be allowed to export LNG, a move seen
by analysts as a first crack in Gazprom's legally enshrined
Novatek has said that the rising costs for new Australian
LNG capacity have led to Asian interest in its Arctic gas, even
though this will have to be liquefied and shipped via the
so-called Northern Sea Route accompanied by icebreakers.
By contrast, state-controlled Gazprom has a project to
liquefy gas at Vladivostok on the Pacific coast, much closer to
"If production and liquefaction on Yamal is competitive with
Australian gas, then the Vladivostok plant or a European plant
would be significantly more competitive," Alexander Medvedev,
CEO of Gazprom Export, said in an interview.
"We will earn more money", he said.
Medvedev said the granting of export rights to rivals would
not hurt Gazprom, provided ground rules are established. Putin
has said a condition of liberalisation is that non-Gazprom LNG
should go only to the growing markets of Asia, not to Europe,
where Gazprom earns most of its revenue.
"It would be a pretty strange thing for Russian gas to
compete with Russian gas, although we are not afraid of
competition and compete with other suppliers," Medvedev said.
"We need to figure out what kind of volumes will end up on
the market. If we are talking about Yamal, its target market is
southeast Asia," Medvedev said.
He said exports of gas by pipeline would not be opened up to
"I don't think it will even be discussed," Medvedev said.
Medvedev played down prospects for a deal to deliver
pipeline gas to China, adding that Gazprom CEO Alexei Miller's
assurances a deal could be reached as early as September
reflected hopes that "thinking makes it so".
He said price, the main sticking point in 15 years of talks
on a pipeline gas deal, remained an issue and that previous
reports that an agreement had been reached on prepayment by the
Chinese side were incorrect.
"When we agree the price we will agree prepayment," he said.
He rejected suggestions that Western hub prices could serve
as a benchmark for Chinese or other Asian gas deliveries.
Gazprom favours the regional oil-linked benchmark, the
Japanese Crude Cocktail (JCC), the basis for deliveries to Asia
from Sakhalin-2, Russia's only functioning LNG plant, which is
operated by Gazprom with partners Royal Dutch Shell and
Some analysts say the potential supply from U.S. projects to
liquefy natural gas from shale would make U.S. spot pricing a
potential benchmark for Asian supplies, but Medvedev rejected
"We don't see any reason to deviate from the JCC."
(Writing by Melissa Akin; Editing by Anthony Barker)