A working meeting took place today between Vladimir Putin, President of the Russian Federation, and Alexey Miller, Chairman of the Gazprom Management Committee.
Alexey Miller briefed Vladimir Putin on the Company’s preparations for the upcoming autumn/winter period. Particular attention was paid to the issues of gas supplies to foreign markets.
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Vladimir Putin: Mr. Miller, how is your work going? Especially within the country? How do things stand concerning the Company, its scopes of work and plans? What about your relations with your partners, particularly on our large-scale projects?
Alexey Miller: Dear Mr. President,
Our main task at the moment is to prepare for the upcoming autumn/winter period, injecting gas into underground gas storage (UGS) facilities. We need to secure the working gas inventories of 72.2 billion cubic meters in Russian UGS facilities by the start of the withdrawal period.
By the autumn/winter period, we will ensure that the potential maximum daily deliverability of UGS facilities in the Russian Federation reaches 843.3 million cubic meters of gas. It will be an all-time high for the domestic gas sector.
Before the end of the year, Gazprom will inject at least 11.4 billion cubic meters of gas into European UGS facilities, more than twice as much as last year.
We see that our European partners are injecting gas at a very rapid pace, and our Ukrainian colleagues are trying to follow suit.
Without a doubt, one of the factors behind the large amounts of gas being injected into UGS facilities is the expiration of the contract for gas transit across Ukraine on December 31 this year.
The question of the transit contract is essential, and yet the top-priority question is whether Ukraine will buy Russian gas under a direct contract.
After all, the answer to this question will also tell us what Russian gas transmission capacities Gazprom will have to guarantee in order to supply gas towards Ukraine.
Vladimir Putin: They will have to be maintained and paid for.
Alexey Miller: Indeed.
Of course, it will also give us an understanding of the price level for the end consumer in Ukraine, since if Gazprom enters into a direct contract for gas supplies, the gas price for the end consumer in Ukraine might go down by 25 per cent from the current level.
Nevertheless, I would like to stress that the main question is the supply of gas to the Ukrainian market. It is a matter of bilateral negotiations between Russia and Ukraine.
Vladimir Putin: What about our large-scale projects?
Alexey Miller: Mr. President, regarding this year’s largest project – Power of Siberia – there is no doubt that natural gas will come from Russia to China on December 1.
It will be a historic event marking the start of gas supplies from the world’s biggest gas exporter to the biggest importer. Over the course of 30 years, 1 trillion cubic meters of gas will be delivered to the Chinese market.
China is the most dynamic and fast-growing market in the world. Together with our Chinese partners, we are currently looking into the possibilities of supplying gas to China via other routes.
Vladimir Putin: Which ones?
Alexey Miller: We are considering the possibility of supplying gas via the western route and also via the Far Eastern route from the Sakhalin gas production center.
Vladimir Putin: In this connection, I would like to get back to the topic that has been repeatedly discussed between us and with our Chinese partners, namely the possibility of using the resources of the Irkutsk Region and the Krasnoyarsk Territory.
Please consider the Yamal reserves as well, in order to secure the amounts required to supply gas via the western route towards China across Mongolia.
I am aware that there are also some challenges with this route, but a preliminary review has shown that it is feasible, and our Chinese partners are in favor of this option, too.
Please look into this issue and report to me.