Putin orders Gazprom to prepare key principles of gas export policy

Russian President Vladimir Putin ordered Gazprom to prepare the key principles of the export policy in the gas sphere during the meeting of the presidential commission for the fuel and energy sector.

"I ask Gazprom to report on the key principles of the export policy at the next meeting, and the Energy Ministry should present an adjusted general development scheme for the gas industry until 2030, as well as the Eastern Gas Program," Putin said.

The U.S. and Canada are already carrying out active shale gas production. "Such new players as the United States and Canada have already started to move. In the U.S., new technologies allow for profitable shale gas production. With the sale of simultaneously recovered components, even at low domestic prices, it has become beneficial in the U.S. Politicians, experts and businesses are talking about a real shale revolution," Putin said.

Last year, shale gas production reached 214 billion cubic meters (bcm) in the U.S., he said.

In addition, energy consumption in the Asia-Pacific region is growing dynamically, a tendency that Russia can take advantage of. Another new trend has also long been underway - that of rising trade in liquefied natural gas (LNG), Putin said.

European countries are gradually forming a common gas market and diversifying gas supply sources. "A brutal fight is unfolding among gas exporters for short-term and long-term contracts," Putin said.

"We are simply obligated to take these trends into consideration, to clearly imagine how the situation will develop not just in the next two to three years, but throughout the upcoming decade," he said.

If the state program is updated and Gazprom drafts the key principles of the gas export policy, Russia will be able to optimize amounts, sources and destinations for Russian gas supplies, Putin said.

That said, all of the documents should retain as priorities provisions for the domestic market, deep refining, the development of gas chemicals and the maximum use of gas components.

Putin urged the ministries and Gazprom to pay special attention to the production of motor fuel from gas.

Energy Minister Alexander Novak told reporters that the Eastern Gas Program will take into account growing production of shale gas, including in China, and diversification of gas supplies, both by destination and type of transport - by pipelines or in the form of LNG.

Novak said that, in adjusting the Eastern Gas Program, the ministry and Gazprom will presume that the Asia-Pacific region will be more interesting. "The market of countries in the Asia-Pacific region is more promising, as growth of consumption here will reach 4 percent per year," he said.

He also said the ministry and Gazprom will consider the issue of postponing the launch of the Chayanda and Kovykta gas fields. "I think that within the context of adjusting the Eastern program we and Gazprom will work out this issue, but a great deal here also depends on the incentives that we are creating for the sector," Novak said.

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