Putin: the growth rate of gas consumption in the world requires to build new pipelines

Putin: the growth rate of gas consumption in the world requires to build new pipelines


TEHRAN, November 23. The growth rate of gas consumption in the world requires to build additional pipelines to expand the supply of LNG, stated President Vladimir Putin at the plenary session of the Forum of gas exporting countries.

“It (consumption growth) opens up great possibilities for increasing production and export of gas and at the same time is a major challenge, he said. – Because you will need to radically accelerate the development of new deposits, modernizing processing facilities, to expand gas transport infrastructure, build more pipelines and to establish an extensive supply routes of liquefied natural gas.”

Putin cited the data of experts, according to which the demand for gas in the world by 2040 will increase by 32% to almost 5 trillion cubic meters, while in 2014 this figure was 3.7 trillion cubic meters.

According to the President, associated with this investment will pay off for decades. “And of course, investors need a clear, strong guarantee. But the main thing – on a par with gas producers investment risks should be borne by future consumers, – stressed the head of state. For energy security it is necessary to pay all: the countries-exporters and the countries-buyers, that is fair and fully consistent with the spirit of market relations”.

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Vladimir Putin, President of Russia, on energy security

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Putin recalled that last year the summit was held in Moscow, and his decision helped to improve the coordination of participating countries in the development of the industry, laid the Foundation for the formation of unified approaches to pricing and equal distribution of risks between consumers and suppliers of fuel. “I am confident that this meeting will be no less productive, and decisions that will be included in the final Declaration, will give an additional impetus to our cooperation, will make more effective joint work to improve international gas trade,” said the Russian leader.

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Vladimir Putin, President of Russia, about necessity of introduction of new gas pipelines

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About the plans of Russia in the gas market

The President of Russia announced plans to triple Russian sales of liquefied natural gas on the world market and the intensification of cooperation in gas supplies from Asian countries.

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“We’re planning on the Asian market to increase our deliveries from 6 to 30 per cent to 128 billion cubic meters”, – said the Russian President at the Forum of gas exporting countries.

He stressed that Russia “increases deliveries of liquefied natural gas to 60 million tons, which means from 4 percent today to 13 (percent) on the world market”.

“Here we have planned a number of projects in both the Eastern and the Northern part of the Russian Federation and the far East of Russia”, – Putin said.
“I am sure that Russia will cope with all these plans, she was capable to realize them”, – assured the Russian leader.

To listen to this audio clip you can download Quicktime.

Vladimir Putin, Russia’s President, on increasing LNG production

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On long-term contracts

However, Putin urged not to abandon the practice of long-term contracts and the principle of take-or-pay in the interests of stability of the gas market.

“I would like to stress that in the interests of stability and predictability of the market, to attract investment in the gas industry in any case can not abandon proven over the years practice of concluding long-term contracts and the use of the principle of “take or pay”. I think it is important that States – participants of the forum showed this solidarity,” Putin said.

However, the President noted that “modern technologies, new business models alter the structure of the gas market in the world.” For example, to fix prices is increasingly used commodity trade, spot mechanisms.

“Last year in Russia, for example, was running a gas trading at the Saint-Petersburg commodity exchange. Less than a year, the trading volume amounted to 6.8 billion cubic meters of gas. Plans to ramp it up to 35 billion cubic meters per year”, – said Putin. He added that Gazprom sold at spot prices 7 billion cubic meters of gas, accounting for about 8 % of total company sales.

To listen to this audio clip you can download Quicktime.

Vladimir Putin, President of Russia, on the principle of “take or pay”

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On the stock exchange

The Russian President said that the volume of gas trade on the St. Petersburg commodity exchange is scheduled to increase to 35 billion cubic meters.
“Last year in Russia was launched gas trading at the Saint-Petersburg commodity exchange.

Less than a year, the trading volume amounted to 6.8 billion cubic meters, he said in his speech at the summit Forum of gas exporting countries. – There are plans to increase it to 35 billion cubic meters per year”. Putin noted that Gazprom sold at spot prices 17 billion cubic meters of gas, representing more than 8% of total sales monopoly.

The President noted that the exchange Commerce is now increasingly used for fixation of gas prices.