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Bloomberg: Gazprom Pitches $99 Billion Gas Development Plan (Update1)

By Michio Nakayama and Megumi Yamanaka

Dec. 21 (Bloomberg) — OAO Gazprom, the world’s largest natural gas exporter, pitched a 2.44 trillion ruble ($99 billion) plan to develop new supplies of the fuel to potential investors in Tokyo.

The Russian gas monopoly aims to build 9,000 kilometers (5,600 miles) of pipelines and drill 1,294 wells in eastern Siberia by 2030, according to a presentation to a group of about 300 businessmen and reporters today.

Russia, the largest fuel supplier, wants to tap eastern fields to boost flagging output at older gas fields. The country is planning pipelines across Siberia to take advantage of demand in Asian markets such as China and Japan, two of the world’s three biggest energy users.

Gazprom estimates total natural gas reserves in eastern Siberia and Sakhalin island to be about 7 trillion cubic meters. It predicts total production of 162 billion cubic meters by 2030, according to the presentation.

The company aims to export 3.8 billion cubic meters annually to China and 1.2 billion cubic meters a year to South Korea by pipelines and to ship 2.8 billion cubic meters per year to Japan in liquefied natural gas, it said. Russia’s domestic market will get 3.2 billion cubic meters.

Gazprom’s pitch to investors comes after a report in the Nikkei newspaper that Russia won’t allow commercial production of gas at the Sakhalin-1 site off Sakhalin island unless the partners in the venture agree to sell all the output to Gazprom. Japan’s Sakhalin Oil and Gas Development Co., or Sodeco, owns a 30 percent stake in the project.

Japan’s vice minister of trade, Harufumi Mochizuki, said yesterday Exxon Mobil Corp., the operator of the project, should decide who buys the gas.

To contact the reporters on this story: Michio Nakayama in Tokyo at [email protected] ; Megumi Yamanaka in Tokyo at [email protected] .

Last Updated: December 21, 2007 02:06 EST

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