Expanding its presence in the liquefied natural gas (LNG) market is a promising activity area for Gazprom Group. Increasing LNG volumes in the Group’s supply portfolio makes it possible to achieve geographical diversification of supply, reduce transit risks, and increase export volumes by moving into new markets which are inaccessible for pipeline gas.
LNG trading within Gazprom Group is handled by Gazprom Marketing & Trading. The LNG portfolio managed by this company consists of LNG volumes from the Sakhalin-2 project as well as LNG from projects outside Russia. This portfolio structure makes it possible to optimize trade flows efficiently and react to changing market circumstances in a timely manner.
In future, the greater part of LNG volumes will come from various projects on Russian territory, including Vladivostok LNG, Baltic LNG, and the expanded capacity of the Sakhalin-2 liquefication plant. Completing these projects will enable a geographical expansion of supply, covering all the promising regional markets. Gazprom Group’s ability to compete in the LNG trade is based on the proximity of its liquefication projects to the major consumer markets, resource base for export, the Group’s own fleet of gas transport tankers, and a great deal of experience in LNG market trading.
Gazprom Group companies presently supply LNG to the Asia-Pacific’s biggest gas consumers: Japan, South Korea, China, India, and others. What’s more, there has been a trend in recent years for new LNG consumer markets to emerge — primarily in the growing economies of Asia (Singapore, Thailand, Pakistan, Vietnam, etc.), Latin America, and the Middle East, where significant domestic gas demand growth is being observed (Kuwait, the UAE, Bahrain). All these countries are choosing to build LNG terminals with a view to converting electric power generation and some industries to gas, and they are promising directions for Gazprom Group’s LNG supplies. Some shipments of LNG have already been delivered to countries such as Kuwait, Thailand, and the UAE.
Growing the LNG export portfolio — by developing Russian projects, by pursuing opportunities to participate in third-party projects, and by carrying out trading operations — facilitates positioning Gazprom as a global energy company.
Small-scale LNG (ssLNG) exports
Work is continuing on expanding Gazprom Export’s presence in Europe’s ssLNG markets, as well as diversifying ssLNG deliveries by road and through the use of various logistics options, including on a remote basis.
Framework agreement on cooperation in the European ssLNG market was reached between Gazprom and Fluxys in March, 2016. Its implementation along with the pilot project for construction of ssLNG-receiving terminal in Rostock was discussed between Gazprom and Gasunie in June, 2016.
In September, 2016, a memorandum of understanding, which set the intentions for joint feasibility and marketing analysis of bunkering of liquefied natural gas-fueled marine vessels, was signed by the Chairman of Gazprom’s Management Committee Alexey Miller and the president and CEO of Japan-based «Mitsui & Co.» Joint works in the field of bunkering will allow developing cooperation in the segment of ssLNG.
A pre-investment study was initiated for the purpose of planning activity aimed at developing small-scale LNG markets in Black Sea region countries (Southern and South-Eastern Europe, Turkey).