AMSTERDAM, June 6 (RIA Novosti) - Projects involving liquefied natural gas carry high risks in terms of technological and technical implementation, the head of Russian energy giant Gazprom said Tuesday.
"Budgets have to be multiplied for many projects and implementation is often far behind schedule. Analysis shows that current technologies are not reliable enough," Alexei Miller told the 23rd World Gas Conference in Amsterdam, adding that LNG projects often produced numerous surprises.
Miller said he was worried that LNG was sometimes used as an extra argument to abandon tried-and-tested gas transportation schemes and technologies.
"We are skeptical about attempts to represent LNG as a universal means to improve energy security for gas purchasers," he said.
Liquefied natural gas is becoming increasingly important for Gazprom, and the share of LNG in the energy giant's operations is increasing as production at natural-gas deposits stagnates. Gazprom clinched its first LNG swap deal with British giant BP in August last year, and has signed more since.
Miller said LNG transportation by sea was efficient for long distances compared to pipeline transportation, but that pipelines should be borne in mind to provide sustainable supplies to Europe.
"Besides, LNG is more expensive, and consequently could set a higher price ceiling on traditional markets for pipeline gas suppliers," Miller said, adding that LNG production remained highly dependent on contracts, and that gas would not be produced without previously signed contracts on purchases.
"Long-term contracts are the only guarantee that capital intensive projects in gas production and transportation will be funded," Miller said.
He said he was sure that companies combining traditional and new technologies for natural gas transportation and storage were the strongest market players.