Gazprom plans on output booster

10.06.2010 11:29

Russian giant Gazprom expects gas output to edge up next year, but to remain below pre-crisis levels in a sign it does not expect European demand to recover quickly.

Gazprom which supplies a quarter of Europe's gas needs, said its production would rise to 528 billion cubic metres next year from 519 Bcm this year.

The company also said it could adjust the planned capacity of its giant South Stream gas pipeline if demand was uncertain.

"At the end of the day demand will determine South Stream's capacity. It is difficult to predict demand but we have enough resources," Reuters quoted Sergei Pankratov, deputy head of strategic development division, telling a news conference.

He said the company was so far sticking to the designed capacity of South Stream to ship up to 63 Bcm of gas to Europe per year.

Gazprom was producing over 550 Bcm before the crisis hit demand in Europe, and its main customers switched to liquefied natural gas and spot gas sources from more expensive long-term contracts with Gazprom for pipeline gas.

Gazprom is not planning to postpone the launch of its giant Bovanenkovo field on the Yamal peninsula from 2012 despite seeing a certain fall in demand in May after a steep recovery at the start of the year, Gazprom's executives said.

"From mid-May we are witnessing a similar situation to last year when there was a steep fall in gas demand and thereby of gas production," Vsevolod Cherepanov, Gazprom's gas output division head, told Reuters.

Source : Upstreamonline