The regular meeting of the Board of Directors is being held at the Gazprom Headquarters.

The Board of Directors took into consideration information on development progress for Gazprom’s liquefied production, transportation and marketing strategy.

Reference:

LNG market has favorable external environment and profitability boosting in the sector. LNG is an essential part of the world’s gas trading which becomes one of the key factors for the world’s market development.

Global gas consumption constantly grows by 2.5 per cent annually and major growth portion is provided by LNG. LNG marketing volumes reached 190 bcm in 2005 increasing two times since 1990s. The growth is stimulated by demand growth for ecologically pure and efficient energy sources in North-Eastern Asia and South Europe. The forecasts show further two-times LNG market growth by 2015 stimulated by demand growth for natural gas import to the USA, Great Britain and Asian countries such as: China, Japan, South Korea, and India.

Gazprom’s strategic goals in the LNG production and supply sector are as follows:

• Efficient system development for LNG production and supply with modern technology decision-making;
• Deliveries diversification and target market expansion;
• Building LNG market leading positions.

From 2004 Gazprom has been developing phased strategy for increasing its position on LNG market. In the framework of the first stage of strategy implementation (LNG - pipe gas spot contracts and exchange operations) LNG was delivered to the USA, Great Britain, South Korea and Japan. Total LNG sales volume was at 0.5 bcm.

The second stage of the Gazprom’s strategy foresees LNG production development in Russia and third countries providing independent LNG marketing. In the aim of efficient entry to global LNG market Gazprom plans to join existing LNG contracts based on resource base of other companies through acquisition and exchange.

Systematic increase of LNG production (in Russia and abroad) and tanker fleet capacity for LNG transportation in parallel with marketing efforts will help Gazprom to take a strong position on the global LNG market by 2030.

The Atlantic Basin LNG market is the most attractive for Gazprom because it is the most broad and liquid market with the high demand/ low supply scenario.