Gazprom will decide in 1Q 2005 the full scope of its planned North European gas export pipeline. According to Gazexport Director Alexander Medvedev, speaking at a briefing in London, the $4-billion capex project could involve installing an underwater pipeline to Bacton on the UK's southeast coast.

Bacton already serves as the starting and reception point for gas feeding through the Interconnector pipeline between Bacton and Zeebrugge, Belgium, in which Gazprom is a stakeholder. The main purpose of the new line will be to feed 20 bcm/yr of Russian gas to the North European market through an entry point in Germany.

Vitaly Vassiliev, CEO of the newly launched company Gazprom Marketing and Trading, based in London, said Gazprom was looking to supply 10% of the UK's commercial and industrial gas needs – around 13 bcm – by 2010. He was confident this target could be met, despite the emergence of competing projects such as the new BBL pipeline from The Netherlands to Bacton, and two LNG terminals in southern Britain. Gazprom was also considering new gas storage projects, both offshore and onshore, to cater for fluctuating demand in the UK.

The gas will come from mostly the company's reserves in Siberia: Medvedev said LNG produced from the planned Shtokmanovskoye development in the Barents Sea is currently being targeted at terminals on the US East Coast.

11/18/04