Gazprom looks to northern Asia to complement European expansion

• 12 years ago (2011-09-28)
• Junior Isles

Asia 850 Europe 1061 Nuclear 640

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Russian gas giant Gazprom, which has recently begun actively studying power generation markets in Europe, is also interested in being part of electricity generation and sales in Northeast Asian countries.

The company’s press service has said Gazprom's board of directors instructed management, "to organize work on analysing electric energy markets, including the markets of countries in Northeast Asia."

Gazprom says its interest in the region is driven by the prospect of increasing deliveries of Russian gas to markets there and the possibility of consolidating its services with involvement in the entire production chain: from supplying gas to being part of the production and sale of electricity.

Gazprom’s potential target markets in northeast Asia include, China's northern regions, Japan, both Koreas, Mongolia, and Russia's own far east. By 2030, Gazprom deputy chief Alexander Medvedev claims the company's share of this combined market should be about 13 per cent.

Gazprom has no generating capacity at all in this region currently. The power stations it controls - OGK-2, OGK-6, TGK-1, and Mosenergo - are all located in the Urals. Gazprom has always been interested in expanding its power presence abroad, but until now its attention had been mainly directed west.

This September, the gas giant began selecting consultants for an analysis of European electric energy markets, and negotiations begun over potential acquisitions and partnerships - setting up joint business with RWE in German, British, and Benelux power markets, for example.

Gazprom's electric power operations outside Russia are linked with an expected shortage of generating capacity in Europe as countries back away from nuclear power in the wake of the Fukushima disaster; a catastrophe which is also driving growth in Gazprom’s own fuel shipments to the island nation.