NOVO-OGARYOVO, Russia--Russian President Vladimir Putin gave the
clearest indication yet Wednesday that he's willing to put an end
to OAO Gazprom's (OGZPY) monopoly on natural-gas exports by
allowing rival companies to ship liquefied natural gas abroad.
The move is being considered because Russia, despite having the
world's largest gas reserves, continues to lag behind other
exporters in tapping the high-value LNG export market.
Russia only accounts for 3.6% of the global LNG market, Mr.
Putin said at a meeting of top government and energy-firm officials
at his residence on the outskirts of Moscow. "If we don't carry out
active policies, we risk completely surrendering this market to
competitors," he said.
"For the development of this [LNG] sector, all conditions must
be created, including the need to consider the possible
step-by-step liberalization of the export of LNG," Mr. Putin
said.
Ending Gazprom's monopoly on exports would be a blow to the
state-controlled company, which is already under pressure from
increasing competition from domestic rivals in the Russian market
and from companies like Norway's Statoil ASA (STO) in Europe.
Gazprom warned last week of a drop in profits for 2012 because
of shrinking sales in Europe, where it sells the bulk of its gas
exports through a large pipeline network.
Russia's budget lost tens of billions of rubles of revenue last
year because of shrinking demand for gas exports, Mr. Putin
said.
Other Russian producers such as OAO Novatek (NVTK.RS) and OAO
Rosneft (ROSN.RS) are increasing their natural gas output, but have
so far been limited to selling it on Russia's domestic market,
where prices are much lower than for exports.
Gazprom operates Russia's only LNG plant, on the Pacific island
of Sakhalin, in a joint venture with Royal Dutch Shell (RDSA) and
Mitsui (MITSY).
Novatek, Russia's second-largest natural gas producer, last year
requested rights to export LNG from a project in the Yamal region
of Siberia in 2016, in a joint venture with France's Total SA
(TOT).
Mr. Putin has ordered a recasting of Russia's gas strategy in
order to focus on LNG and deliveries to Asia. Neither Mr. Putin nor
other officials have suggested breaking Gazprom's monopoly on its
main method of exporting via pipelines.
Gazprom declined to comment on Mr. Putin's statements. The
company has in the past strongly opposed other firms being granted
export rights, saying Russian gas companies should not compete
abroad.
Igor Sechin, chief executive of Russian oil giant Rosneft and a
political ally of Mr. Putin, threw his weight behind calls to allow
firms other than Gazprom to export liquefied natural gas, telling
officials at the meeting Wednesday that they should liberalize LNG
exports from Russia.
Mr. Sechin said Rosneft had huge natural gas reserves--alongside
oil--on licenses it holds on the Arctic shelf.
He said allowing LNG exports would not harm Gazprom as they
would be delivered to new customers in the Asia-Pacific region by
oceangoing tankers.
Write to James Marson at james.marson@dowjones.com
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