Bloomberg News

Gazprom's Medvedev Comments on Asian Gas Sales, Sakhalin-2

September 22, 2005

Alexander Medvedev, deputy chief executive of Russia's gas monopoly OAO Gazprom, comments on sales of the fuel to China and Japan, operations in East Siberia and participation in the Sakhalin projects.

Medvedev was speaking in an interview in Beijing yesterday.

On China business:

``China has the number one priority among Asian countries for us. First of all, growing demand in energy for China both in gas and oil. Secondly, in spite of long distances, we're neighbors.

``We want to expand our business commercially to ensure stable income for our investment program. We're expanding new markets and we're doing every bit to build relationships with Asian nations.

``We should put the task to our Chinese partners to fix the long-term contracts, desirably not later than the first half of next year, to prepare for us to transport, and for the upstream resources for production.''

On Gazprom's relationship with Japan:

``We're to become a shareholder in the Sakhalin-2 project and for Sakhalin-2 Japan is one of the major markets.

``I don't see any serious discussion of pipeline gas to Japan. Japan is focused on LNG imports. We will play this role for Sakhalin-2 as well as being part of consortia for international projects.''

On agreements for gas deliveries from East Siberia :

``I would like to stress that we already have different owners of the resources in east Siberia and the Far East, part of the resources is not with us. We've been nominated by our government to be the coordinator. This coordinator role means we'll be responsible for gas transportation, irrespective of the source. The owners of the resources appreciate this.

``We have an agreement with TNK-BP Ltd. As soon as the Kovykta oilfield will be involved, exports from east Siberia and the Far East will be channeled to Kazakhstan through Gazprom exports.

``Kovykta is a big field. I'm rather sure, sooner or later, the gas from Kovykta will be part of the export portfolio. But at which stage, either it will be between 2010 and 2015 or 2015 and 2020.''

On the Sakhalin projects:

``We would like to become the owners of resources, not only in east Siberia but also in Sakhalin area. If Sakhalin-3 goes to tender, we'll participate definitely.

``I don't dispute that in our discussions in the other Sakhalin projects. We'll find a solution through which we will become a shareholder like it happened in Sakhalin-2.''

On asset acquisitions:

``Recently, we won two exploration blocks in Venezuela. Latin America is one of our interests. Africa, Libya, Algeria, Angola, Namibia would also be of interest to us. We will diversify our reserves base outside Russia.

``It's absolutely a good time to acquire these assets now. We're in a position to put up an adequate price, in view of our diversified businesses, we can optimize the production profiles and marketing profiles.''

To contact the reporter on this story: Wing-Gar Cheng in Beijing at

To contact the editor responsible for this story: Reinie Booysen at

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