MOSCOW, December 20 (RIA Novosti) - Russian energy giant Gazprom [RTS: GAZP] expects to produce 550.2 billion cubic meters of gas in 2006, an official of Russia's gas monopoly said Wednesday.
Kirill Seleznyov, head of Mezhregiongaz, a subsidiary of Gazprom that manages domestic sales, said gas output will expand 1% in 2006, compared with 2005.
Seleznyov said Gazprom and independent gas companies are set to produce a total of 645 billion cubic meters of gas this year, while gas consumption is forecast at 455 billion cubic meters.
Gazprom's gas production is expected to reach 674 billion cubic meters by 2020, whereas domestic gas consumption is forecast at 574 billion cubic meters, the official said.
The state-owned energy giant plans to launch new deposits to reach the target, including the massive Shtokman field on the Arctic shelf in the Barents Sea and gas deposits in West Siberia.
Since Gazprom began work on the shelf, it has opened four gas deposits in the mouth of the Ob and Tazov Rivers in West Siberia, with total reserves of 860 billion cubic meters.
Gazprom plans a tremendous increase in its gas reserves, including by 600 billion cubic meters at the Yamburg gas deposit in the Yamal-Nenets Autonomous Area, and by 720 billion cubic meters in promising sections in the north of the Ob River in Siberia.
Gazprom also expects to expand its gas reserves - already among the world's largest - by 300 billion cubic meters of gas on the Priyamal shelf in the South Kara Sea in Russia's Arctic by 2010.
By 2010, the company plans to complete exploration of the Shtokman gas condensate deposit in the Barents Sea, as well as the Prirazlomnoye and Dolginskoye deposits.
Earlier reports said Gazprom expects gas reserves at the Shtokman deposit to grow by 700 billion cubic meters by 2010.
Seleznyov said Gazprom intends to invest about 370 billion rubles ($14 billion) over the next three years in gas production and the development of its gas-transportation network.
"It is necessary to invest over 369 billion rubles in gas production and the development of gas-transportation capacities in 2007-2010," he said, adding that the company's spending could be partially offset by an increase in the government-regulated price for natural gas.
He said the price for Russian natural gas traded on the gas bourse in 2007 will be 30% higher than the price set by the government.
The government, which had imposed limits on energy price increases this summer, set the 2007 gas price at $51 per 1,000 cubic meters. Seleznyov said the price could double to $116 per 1,000 cubic meters in 2011, adding that it should be as much as $169 per 1,000 cubic meters next year, according to company's formula for settlements with power generating companies.
Seleznyov said Gazprom intends to buy power-generating assets under its strategy for the power sector, but has so far refused to specify which assets the energy giant is targeting.
He said the board will discuss Gazprom's strategy in the sector in early 2007, adding that retail companies could also fall under company's strategic interests.
