MOSCOW -- Russian gas monopoly Gazprom's export revenues soared 43 percent and hit a record of $37.2 billion in 2006 as it sold more gas at higher prices to over 20 European countries, its export chief said on Wednesday.
"We have fully met our export plans despite unusually warm weather in Europe," Alexander Medvedev, Gazprom's deputy CEO and head of its export arm Gazexport, told reporters.
"Be prepared for another record," he said, answering a question about export sales in 2007, without giving details.
Gazprom, which supplies a quarter of Europe's gas needs, sold 155.6 billion cubic metres of its own gas and gas of third parties in Europe, up from 154.3 bcm in 2005, he said.
Gas export prices fluctuate together with oil and refined products prices with a lag of six to nine months.
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This year, Gazprom is unlikely to enjoy another big spike in export prices as it had already cut its forecast for average prices in Europe to $263 per 1,000 cubic metres from the previous $290 following a decline in global oil prices.
The new forecast is close to average prices Gazprom was charging its clients in the first half of 2006.
Medvedev also said Gazprom's capital expenditure plans would fully cover its production needs, enabling it to meet demand in Europe as well as supplying enough gas to China in the future.
He said Gazprom was not planning immediate purchases in the United States, such as gas terminals, as it first wanted to start producing liquefied natural gas (LNG) of its own.
FOCUS ON SAKHALIN GAS
China and LNG are at the core of Gazprom's strategy of becoming a truly global diversified energy player.
Medvedev said he hoped to conclude commercial talks with China over supplies of around 80 bcm a year by the end of 2007.
On the LNG front, Medvedev said Gazprom would continue studying options for the untapped huge Shtokman gas field on the Barents Sea and plans for an LNG facility on the Baltic Sea.
Gazprom will also this year gain a 50 percent stake in Sakhalin-2, one of the world's largest LNG projects, previously led by Royal Dutch Shell. Gazprom will pay $7.45 billion for half of the project, which has already presold most of its output to China, South Korea and the United States.
Medvedev said Gazprom was considering increasing the capacity of Sakhalin-2 by bringing gas from the neighbouring Exxon Mobil-led Sakhalin-1 project, which is exempted by law from Gazprom's monopoly over Russian exports.
"Sakhalin-1 is a potential source of additional gas for Sakhalin-2... The law does not specify what gas exports are. Gas can be sold at the wellhead or at the border," he said.
COMPETING IN EUROPE'S SOUTH
In Europe, Gazprom's priorities are to build new transit routes after pricing disputes with Ukraine and Belarus repeatedly put under threat its transit to Europe and led to major EU's criticism of Russian energy policies.
Medvedev said Gazprom would soon complete talks with Dutch group Gasunie, which is due to become a fourth member of Nord Stream, a pipeline which is due to bring up to 55 bcm of gas to Germany under the Baltic Sea from next decade.
Other existing members are Gazprom and Germany's BASF and E.ON.
He said Gazprom hoped to complete studies on expansion of its pipeline to Turkey, known as Blue Stream, to southern Europe within one year.
He also said the rival Nabucco pipeline, which plans to supply Caspian and Iranian gas to southern Europe, was doomed to failure without Gazprom's involvement.
"Despite support from the EU, Nabucco is facing problems, which are evident to any specialist. There are good and powerful companies involved but they don't have gas," Medvedev said.
Nabucco is a keystone to Europe's energy security policy after questions arose about reliability of Russia following gas cuts to Ukraine in early 2006.
"Diversification will happen, but it cannot happen without Gazprom. I think it is obvious even for the participants of the Nabucco pipeline," said Medvedev.
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