THE TIMES (UK): Russia's Gazprom wants 10% of UK gas sales by 2010: GAZPROM, the giant Russian utility, has launched a campaign to secure control of a tenth of Britain’s gas market within five years.”: “The world’s largest gas company is squaring off against Britain’s traditional gas producers, notably BP, Total and Shell…” (ShellNews.net) 18 Nov 04
By Carl Mortished, International Business Editor
November 18, 2004
GAZPROM, the giant Russian utility, has launched a campaign to secure control of a tenth of Britain’s gas market within five years.
The company, which has access to a fifth of the world’s gas reserves and already supplies a quarter of European demand, yesterday threw down the gauntlet to rival UK gas importers, declaring it would increase its sales by 40 per cent a year.
Vitaly Vasili, Gazprom’s chief executive officer of marketing in the UK, said the company could achieve its target without building new pipelines to Britain. “We are confident about achieving our ambition. We are not planning to buy market share but our prices will be competitive,” he said.
The world’s largest gas company is squaring off against Britain’s traditional gas producers, notably BP, Total and Shell, whose gasfields in the North Sea have kept Britain warm for decades but are beginning to dwindle. Gazprom has set its sight on the gap that is opening in the market between the available North Sea reserves and rising demand.
At present Gazprom sells about 3 billion cubic metres of gas in the UK market which totals 100 billion cubic metres. The company hopes to sell 13 billion cubic metres by 2010. Gazprom does not plan to sell to homeowners and its ambitions will put it on a collision course with UK gas producers in the industrial sector.
Energy experts say that Gazprom has enough low-cost gas to achieve its goal. “A tenth of the market is very ambitious but I have no doubt they will do it,” said Niall Trimble of the Energy Contract Company, a gas market consultancy. “It would make them the second largest supplier.”
Gazprom at present supplies non-Russian gas through swap agreements with major distributors in Germany, such as Ruhrgas. The Russian company owns 10 per cent of an interconnector pipe between Britain and Belgium, and planned expansion will triple capacity in two years. Gazprom will secure an extra five billion cubic metres from the scheme.
In the long term, supplies will come from an undersea link that will pump Russian gas into the German grid.
The battle for gas customers will peak in 2007 with the arrival of rival schemes, such as Langeled, a pipe between Norway and Britain. Led by Norsk Hydro, Statoil and Shell, Langeled could take a fifth of the UK market and will compete with another interconnector that links Britain to the Netherlands.
Meanwhile, BP has teamed up with Sonatrach, the Algerian company, to import liquefied natural gas into the Thames Estuary. Two further LNG projects, led by BG Group and ExxonMobil, will import LNG into terminals in Wales.