Wednesday, November 12, 2008
Gazprom says natural gas prices for Europe to drop in 2009
NOVY URENGOI, November 12 (RIA Novosti) - Export prices for sales of Russian natural gas to European consumers will start to go down at the start of 2009, Gazprom CEO Alexei Miller said on Wednesday. "It is absolutely true that gas prices for European consumers will start to go down from the start of 2009," Miller said, adding that the price of natural gas for Europe in the fourth quarter had been above $500 per 1,000 cubic meters, an all-time high. Miller said natural gas prices were not as volatile as oil prices as the gas pricing system made them more predictable, adding that the price of gas was based on the cost of crude oil and petroleum products. He also reiterated however that he believed the era of low hydrocarbon prices was over. Gazprom has offered Germany's BASF chemicals group the opportunity to join gas and petrochemical projects in East Siberia, Miller also said. The Gazprom top executive said the Russian energy giant had developed a program of natural gas production, processing, and transportation in East Siberia and the Far East, adding that Gazprom personnel had recently made a presentation of the program for Wintershall, a wholly-owned subsidiary of BASF. "BASF is a leader in gas chemistry and we are saying that projects in the field of gas chemistry and petrochemistry could become another area for our further cooperation," Miller said. Gazprom intends to channel about 30% of its investment program in 2009 into the development of natural gas projects on the Yamal Peninsula in Russia's Arctic, Miller said. Gazprom views Yamal as a key source of its future natural gas output amid declining gas production in West Siberia. Natural gas deposit development on Yamal Peninsula will enable Gazprom to bring up gas output in the region to 250 billion cubic meters annually. As of today, 11 gas and 15 gas condensate fields have been explored on Yamal, with proven natural gas reserves amounting to 10.4 trillion cubic meters of gas, 228.3 million metric tons of condensate, and 291.8 million metric tons (2.1 billion barrels) of oil.