Russia and Europe – Moving Forward in Challenging Times Page 5

BLUEMarch 2015/ Vol. 8/ Issue 1 FUELBLUE FUEL Gazprom Export Global Newsletter March 2015/ Vol. 8/ Issue 1

Gazprom Group Enhances its Footprint in European NGV Market Page 10 “Blue Corridor-2015” NGV Rally to Hit the Road in May Page 14

Ship-to-Ship Transfer: Making the Most of GM&T’s Shipping Assets Page 15

March 2015/ Vol. 8/ Issue 1

To Our Readers: Gazprom Export’s New Address...... 4

Russia and Europe – Moving Forward in Challenging Times ��5

CNG Remains Highly Competitive amid Oil Price Fall...... 9

Gazprom Group Enhances its Footprint in European NGV Market ��10

Gazprom Leads the Way on LNG in Germany...... 11

High-Octane, Easy on the Environment...... 12

“Blue Corridor-2015” NGV Rally to Hit the Road in May ��14

Ship-to-Ship Transfer: Making the Most of GM&T’s Shipping Assets ��15

Gazprom Energy in the Spotlight...... 16

Gazprom Marketing & Trading Wins ‘Natural Gas House of the Year’ Award 17

E-world 2015...... 18

Russian Gas in the EU - Is Replacement Feasible?...... 18

The Future of Oil and Gas Projects...... 21

Gazprom’s Buddy Card...... 23

Gazprom Germania Presents the 10th Russian Film Week in Berlin ��24

Synergy in Music in Singapore...... 25

GM&TS Supports Russian Language Studies...... 25

Publishers Contact Info: www.gazpromexport.com | [email protected] +7 (812) 646-14-14 | [email protected]

2 March 2015/ Vol. 8/ Issue 1 BLUE FUEL

To Our Readers: The project involved both the reconstruction and fit-out Export project steering committee and the support of the Saint works. Parts of the building had to be rebuilt to reinforce Petersburg Authorities with special thanks to the city Governor. the foundations and increase it’s the usable office space. Gazprom Export’s new address An international team of architects and engineers were The inauguration ceremony took place in December 2014 commissioned to undertake this. The designers developed a and was attended by Chairman of the Gazprom Management Moving to a new house is a milestone The new building is also tailored unique engineering solution that enabled the reinforcement Committee Alexey Miller, Deputy Governor of St. Petersburg in life. In the life of our company this to Gazprom Export’s business of the building, whilst preserving its external walls and overall Mikhail Mokretsov, Deputy Chairman of the Gazprom important event happened recently – now requirements. Employees benefit from original design. Management Committee Alexander Medvedev, and Director Gazprom Export has a brand new home open-plan offices with break-out areas, General of Gazprom Export Elena Burmistrova. The move was in St. Petersburg, located right in the meeting rooms, a conference hall and An international team of experts was carefully chosen to enable completed during January 2015. historical heart of the city. many more amenities. The conference best practice – in both design and implementation. hall for 200 people includes state- The open working environment is a new concept for Gazprom Our headquarters is a part of the of the art multimedia equipment as The reconstruction works started in February 2014 and had the Export staff, so it while it may take time to adjust to the new ensemble of architectural monuments – well as equipment for simultaneous floors ready for occupation by the end of the same year. That’s surroundings, everyone enjoys the beauty of the building and the Aleksandrinskiy Theatre, the Russian translation and special acoustics. The quite impressive for a project of the scale. We encountered the convenience of its central location. We are very proud that National Library, and the Anichkov office features a building management other challenges such as changing requirements and regulatory Gazprom Export now occupies one of the finest offices in St Palace. Ostrovsky Square is the most system (BMS)-controlled working restrictions, but overall we coped very well. Petersburg – if not in Russia! renowned achievement of Russian environment, which ensures smart use of architecture and town planning. all maintenance resources. The success of the reconstruction project was possible thanks to the collaboration of many parties including the Gazprom The new Gazprom Export building was The fourth, fifth and sixth floors are originally constructed in 2008/2009 and connected by a unique floating staircase, initially designed as a hotel/casino but which looks as if it is hanging in the air. Russia and Europe – Moving Forward in Challenging Times was not used for this purpose. The interior’s grandeur is also enhanced by the distinctive “Neuron Wall” – a Speech at the 8th European Gas Conference in Vienna (Austria) by let’s first have a look at the There are seven floors totalling more than bronze art structure designed and Elena V. Burmistrova, Director General, Gazprom Export, January 2015 prospects for the European 17,500 square meters. The building’s created in the UK. The Neuron Wall gas market. ‘grand style’ exterior reflects its historic symbolises Gazprom’s global network It is a privilege and a great pleasure for me to address this architectural surroundings and the and its business power. This global distinguished audience. It’s my first speech at an international European gas market outlook neighbouring buildings. The interior is network theme runs through the entire conference as Director General of Gazprom Export and I’m equally impressive, with natural light from building interior and is featured in various happy that this is happening in Vienna. Austria is known to be Due to declining indigenous the atrium contributing to an airy feel furniture designs and other fixtures our time-honored partner in Western Europe. production, European additional throughout the building. and fittings. demand for imported gas will Today, I would like to share my views with you on the future of reach 165 bcm in 2025 and the European gas market and the role Gazprom can play on 208 bcm in 2035. Russia’s this market. ample gas reserves, supply capacity and competitive pricing combined with moderate yet gradual growth in demand in It is evident that the current commercial and political Europe will ensure that Gazprom will continue to play a vital role environment is exceptionally challenging both for the industry on the European market. and natural gas as a commodity. Turbulent times are when long- term relationships are under strain and undergo a stress-test I am confident that natural gas is destined to play a key role in and when bold decisions and firm actions are essential. the continent’s fuel mix. After all, one should not forget that it remains one of the most environmentally friendly, economical, There is no doubt that Europe remains and will remain and readily-available energy sources. In the long term we expect Gazprom’s top export market, with nearly half a century long that new applications for gas in Europe, namely, small scale history binding us together. Yet, we are always on the look-out CHP (combined heat and power stations), bunkering and road for new business opportunities – also outside of Europe. The transport, will result in additional demand of almost 140 bcm by year 2014 saw the signing of a historic deal to supply 38 billion 2035. The figure is comparable to our company’s current export cubic meters of Russian gas to China for 30 years. Soon enough, volumes. We also anticipate natural gas to rebound in power we expect gas exported to Asian markets to be comparable to generation in the coming years, although this market segment the volumes supplied to our European partners. experienced an apparent growth trend in the use of coal.

True, Gazprom is going eastward, so how will our relationship with Europe evolve in the coming years? To answer this question Elena Burmistrova, CEO of Gazprom Export, Mikhail Mokretsov, Vice-Governor of the city of St. Petersburg, Continues on page 6 Alexey Miller, Chairman of the Gazprom Management Committee

4 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 5 March 2015/ Vol. 8/ Issue 1 BLUE FUEL

We are committed to contribute to Finally, natural gas, unlike renewable As I said at the very beginning, Gazprom remains and will remain position, which was not conducive to implementing this project. meeting the additional demand for energy sources, needs no subsidies. committed to Europe. The problem is not only in the regulations, and not only in the “blue fuel”. What it does need is fair competition, a Third Energy Package. The fact is that Bulgaria would not grant level playing field. We did our utmost to solve our differences with Ukraine’s permit for the construction of the South Stream pipeline. The fastest pace of demand growth Naftogaz. We continued to supply gas for months after having will be seen in the transport sector, a The future of Gazprom in Europe received our last payment. We concluded the current ‘winter Once again, let me reiterate: gas transit through Ukraine is a segment where Gazprom is already package’ deal to help Ukraine in the cold season and times of system problem which has not been solved so far while putting deeply involved. The Gazprom Group Now turning more specifically to the role of high demand. into jeopardy the security of our supplies to Europe year after already operates an extended network Gazprom, I would like to start by reminding year. It is evident that neither we nor our European partners can of compressed natural gas filling you that Russian gas is actually one of Why did we do it? Because being a reliable supplier is our top achieve a final settlement, and the Ukrainian non-compliance stations in several European states, the most affordable of all. The pricing priority. We cannot allow ourselves to endanger the well-earned with the “winter package” due to financial constraints is a clear and also promotes the vast use of LNG formula is based on the principle of fuel trust and confidence of our European partners. We never proof. At present, Ukraine has no more than 10 bcm of gas in transport. alternatives and takes into account the backtrack on our commitments. in its underground storage facilities. It means Ukraine cannot fuel mix of national markets. Besides, it guarantee stable gas transit. This is the key reason why a gas However, despite these positive incorporates the peak shaving mechanism This is also the reason we have in the past years consistently hub at the Turkish-Greek border is the only option to guarantee developments and expectations, the that smoothes the effect of eventual oil worked on building more reliable supply routes to Europe. We security of supplies to Europe and ensure market predictability. future of natural gas in Europe is currently price shocks for a period of several months. have drawn lessons from the 2009 gas transit crisis. Now, the being called into question due to other Due to this formula, our prices are fully Nord Stream pipeline has already been up and running for a few In December, Gazprom’s cooperation with Turkey experienced newly emerging challenges. Surprisingly, predictable and are not prone to sharp years. And it has proven to be a highly reliable route to deliver a strategic upgrade, and we have now decided to re-route the some in the ecologically-wise Europe are changes the way oil is, and yet our clients gas straight from Russia to Germany and further on to other pipeline to bring Russian gas to the border of the EU instead. starting to doubt the role of natural gas in enjoy the benefits of falling oil price. European markets. The plan is to pump 63 bcm of Russian gas through the its energy mix, and even go as far as to proposed Turkish Stream pipeline. While 14 bcm is destined advocate that Europe should promote the So, when it comes to gas-to-gas We wanted to do something similar in Southern Europe, because for the Turkish market, the rest would be available for our use of cheap and dirty coal. competition, there is no question that we know how difficult it is for those countries to ensure that European customers at a hub on the border with Greece. I am Russian pipeline gas is still one of the gas reaches their grids. Unfortunately, our proposals to build convinced this new project will serve the best interests of all This cannot be accepted as a sensible cheapest options in Europe. Other the South Stream pipeline ran into the European Commission’s parties involved. approach. Recent political turbulences supply options like LNG are nowhere have sometimes resulted in negative near as competitive. Many now count Continues on page 8 international sentiment, which is now on American LNG as a new affordable turning into anti-gas sentiment. This is solution to solve the European energy a worrying trend. Not only for Gazprom, dilemma. But the comparative analysis but also for our European partners, for shows us that US LNG delivered to industrial efficiency, for financial rationale Europe on a “Cost plus” basis will never in energy development strategy, and even be cheaper than gas on the British for dealing with harmful emissions and hub, NBP. It means that American LNG the challenges of climate change. supplies – if any eventually reach the European market – will be too modest Let us not forget that natural gas can play in volume to change the continent’s a crucial role in achieving ALL of the EU’s energy landscape. environmental goals! Increasing the share of gas in the EU’s energy mix by only 1% When looking at alternatives, we strongly can help reduce emissions by 3%, which believe Russian gas is going to remain is no small contribution. one of Europe’s best choices. Despite the current turbulence, felt by the European Natural gas is also a promising alternative energy market, Gazprom’s share motor fuel, being much cheaper and remains stable – about 30%. Today, local cleaner than traditional fuels like petrol production in Europe is declining, the or diesel. The market of gas-powered political situation in North-Africa remains vehicles is more advanced than the unstable, and reserves in the Middle market of vehicles running on electricity East are far from coming online soon for or hydrogen. The infrastructure for gas- Europe, while Gazprom already provides as-motor-fuel deliveries already exists reliable supplies of blue fuel for our while other technologies still face many number one partner. obstacles when it comes to their maturity and economic viability. Continues on page 7

6 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 7 March 2015/ Vol. 8/ Issue 1 BLUE FUEL

Besides the pipelines, we are investing Of course, the new focus does not CNG Remains Highly heavily in gas storage infrastructure. That mean having to re-focus. Despite helps provide a stable and flexible supply our natural drive for diversifying our to Europe. In 2014, volumes of our gas in customer base, we are fully committed Competitive amid Oil Price Fall European UGS facilities exceeded 5 bcm. to our long-standing and trustworthy And the company plans to expand its European partners with whom we Eugene Pronin, Gazprom Export Senior their wallet for cars driven by conventional fuels instead of own underground gas storage capacity in share a history of efficient and Specialist, IGU WOC5 Chairman ecologically-responsible but more expensive biofuels or Europe to 5bcm by 2017. beneficial cooperation for almost 50 e-mobility options. years. Gazprom Export continues to As oil prices keep nose-diving, Gazprom has always considered pursue a diversification strategy that industry analysts started questioning The nearest competitor of traditional liquid fuels – natural gas – underground gas storage as a key factor not only increases our market reach, the competitiveness of alternative however, feels very comfortable in this new paradigm. It remains of safe and reliable gas supplies to multiplies gas export destinations and fuels for transport versus steadily the most affordable and environmentally-friendly transport fuel Europe; therefore, the increase of active business clientele, but also further cheapening petrol and diesel. Amid (see graph). gas stocks in the European underground enhances existing relationships with our the unconventional oil boom in the gas storage facilities remains a priority customers in Europe. U.S. and weakening demand for oil in Given the cyclical nature of the global oil market, it is normal for us. Europe and China, petrol prices have that prices of crude oil and its derivatives follow the curve of The relevant obligations on gas supply seen a sharp decline since mid-2014. rise and fall. The key question is how high they rise, and how The company plans to increase the to China will not affect contracts already deep they fall. We witness national, regional or even global volume of active gas available in concluded with other purchasers of Unsurprisingly, such a situation dramatically changes the price fluctuations. The last but one global fall of petrol pump European UGS facilities through the Russian gas. On the contrary, the behavior of consumers. It forces them, for instance, to travel prices happened in 2008 – 2010. Then they rose again, reaching construction of new, and the expansion concept of gas deliveries to China via the more (according to American Automobile Association, during previous and even higher levels, and began climbing further in of the existing storage tanks. The “western route,” which is now the subject the Thanksgiving holiday season 2014, the highest number of 2013 – 2014. However, previously such temporary drops did not project of construction of the Damborice of negotiations, stipulates the use of the Americans since 2007 got behind the wheel) or vote with affect the development of the global natural gas vehicle (NGV) underground gas storage in the Czech same reserve base. Gazprom possesses market: the ‘global population’ of NGVs has grown Republic jointly with Czech MND is sufficient gas resources and production 5.6 times since 2004 and demand for natural gas at one example. Another example is the capabilities to meet these obligations least 3.2 times. The below graph shows that CNG expansion of the Katharina underground altogether. We are investing billions of prices react more smoothly to oil shocks always gas storage in Germany. Besides, new dollars and euros to develop the world’s preserving the price gap to liquid fuels. There is no storage capacity may be built along largest gas reserves so that European reason to expect any changes in this regard neither the new gas transportation routes in customers can take advantage of the today nor in the future. the future. benefits of the most ecologically-friendly fossil fuel. A lower price is not the only advantage of natural This all allows us to continue our work gas. The key factor is that natural gas is far less as a reliable supplier of gas to Europe. We have grounds to believe that the polluting. NGVs emit one quarter less CO2 than cars We stand ready to provide European political environment in Europe will be burning gasoline and 20% less than those using markets with the gas they require. But if restored to a situation in which we feel diesel. Natural gas fueled engines emit 95% less it wants it, Europe needs to make sure welcome again. We are keen to continue nitrogen oxide and do not emit soot at all. the right conditions are in place to let doing business and hope the European market forces play their part. Gas is not a Union in the future will foster exactly that. During the past decade the global automotive political weapon, it is a commodity. Business, pure business – without any industry has recognized the unique environmental political motives. and economic benefits of CNG and LNG. Today, Next steps Sources: EIA, Gazprom export, Europe’s Enery Portal, NGV Communication Group, there are good grounds to forecast that by the end Metanograph, Automobile Association – UK, NGRUS, LNG24, Russians and Europeans are bound of the 2020s demand for natural gas in transport all In parallel, Gazprom is exploring other together: by our history, our geography, over the world may reach 70 to 80 bcm per year. operational activities. As a global our commercial relations, and, ultimately, company, we are always on the look-out by our common interests. Let us benefit for new business opportunities and we from this mutual dependence, rather than believe Asia presented us with one, which running the risk of breaking it down and was impossible to decline. parting ways. And let’s allow gas to do what it does best: provide clean energy I was personally involved in closing a for the future! landmark deal with China last year, and I am very happy that Gazprom is stepping into this new venture.

8 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 9 March 2015/ Vol. 8/ Issue 1 BLUE FUEL Gazprom Group Enhances its Gazprom Leads the Way Footprint in European NGV Market on LNG in Germany

By the end of 2014, the Gazprom Group To promote gas as a motor fuel Gazprom Talk of constructing LNG terminals in Germany stretches back Gazprom Germania’s Senior Managing Director Vyacheslav significantly increased the number of Export together with its partners decades, but for a long time, that never translated into anything Krupenkov is optimistic: “The more LNG terminals and filling operating CNG and LNG filling stations organizes annual rallies of natural beyond initial planning. Those initial plans promoted by German stations are established, the higher demand will grow. Demand in Europe and boosted gas sales gas-fuelled cars under the name “Blue and other European companies often cited LNG terminals’ is already greater than supply.” for transport. Corridor”. In 2014, the participants drove potential to reduce dependence on Russian natural gas as a along the motorways of Estonia, Latvia, reason for their construction. Large LNG import facilities are Today, the Gazprom Group operates 44 Lithuania, Poland, the Czech Republic, already being constructed for this purpose in Świnoujście, CNG filling stations and two LNG filling Germany, Austria, Italy, Slovenia, Croatia, Poland and Klaipeda, Lithuania, and are close to completion. units in Europe. Another six stations run Serbia, Hungary, Slovakia and Belarus. by partner companies are sourcing gas Along the route representatives of the However, a new market segment is flourishing in Germany for from Gazprom. In comparison, at the end Gazprom Group and other industry LNG as an environmentally-friendly alternative fuel for shipping of 2013, the Gazprom Group owned 27 experts discussed the prospects of and other transportation. Hamburg-based Bomin Linde plans gas filling stations in Europe. the application of the “blue fuel” in the to open an LNG terminal in Hamburg harbour. Gazprom has transport sector during round-table announced its plans to establish an LNG terminal in Rostock, Volumes of CNG and LNG marketed events, while gas-fuelled vehicles were in Germany’s state of Mecklenburg-Western Pomerania, by through the network of company’s and exhibited in show-room areas. Returning 2017. The terminal will, among other things, supply fuel to partner-operated gas filling stations to Nuremberg and hosting a round-table the shipping industry in the Baltic Sea area. Russia is at the surged more than nine fold compared in the German federal state of Bavaria forefront of using LNG in transport, and while the final details to 2013. was of special importance as Gazprom are yet to be decided following completion of the feasibility Germania acquired a network of 12 study, there can be no doubt about Gazprom Germania’s The majority of CNG filling stations owned refueling compressor stations in 2013. determination to construct the facility in Rostock. by the Gazprom Group are located in Germany, totaling 27. The Czech Republic The Gazprom Group considers the use Gazprom Germania is partnering with Hafen- and Slovakia, with 17 filling stations, are of natural gas as motor fuel in Europe as Entwicklungsgesellschaft Rostock (HERO) on the two further important markets. Poland a promising growth market, and plans to project. The two companies signed a memorandum of hosts two LNG filling units which are used build up its network of refueling stations understanding in July 2014. “We look forward to working with to tank gas-fuelled buses in Warsaw and and therefore increase the volume of Gazprom. LNG has the best environmental and safety balance Olsztyn. This is the first and so far the sales of natural gas as fuel for transport. of all the fuels used to power ships, and that allows shippers only project in Europe featuring city buses to meet strict environmental protection standards,” says Ulrich Gazprom Germania Senior Managing Director Vyacheslav Krupenkov fuelled by liquefied methane. Bauermeister, HERO’s managing director. (middle); HERO Managing Director Ulrich Bauermeister (right)

From 1 January 2015, stricter environmental standards will Rostock is particularly well suited given its existing port apply to shipping in the North Sea and Baltic Sea. Under the infrastructure, says Krupenkov. The terminal is likely to be new standards, shipping fuel will be allowed to contain just 0.1% constructed at the site of the east port, where Gazprom sulphur instead of the 1.0 % currently permitted. Experts cite Germania would be able to use existing berths, piers, this as one of the reasons that the use of LNG in the shipping and quays. sector will grow in the long term thanks to its low-emissions. The company is not yet able to supply details on the new Ships than run on LNG emit significantly lower quantities of terminal’s size and capacity; more information on the potential pollutants, particularly in comparison with the heavy fuel oil demand will be available once the feasibility study has been currently used – up to 30 % less carbon dioxide, and over 90% completed. In the long term, Gazprom Germania also plans to less nitrogen oxide and sulphur dioxide. In addition, LNG is also expand its Rostock operations to other sectors, and supply more cost-effective than diesel. LNG to commercial customers, heavy-duty vehicles, and public transport. Germany will continue to be Gazprom’s That’s hugely persuasive for shippers, for whom fuel is one of “most important market in Europe,” says Krupenkov. the largest cost factors. But no shipper will convert their ships to run on LNG until the LNG supply is easily accessible, stable and secure. In other words, there needs to be a network of LNG stations at the ready.

10 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 11 March 2015/ Vol. 8/ Issue 1 BLUE FUEL

trophy!” the elated Larini exclaimed. “It was a nice race, with a range from the simple fuel cans used in most popular racing High-Octane, lot of action at the head of the field.” series (including NASCAR) to the high-tech fuelling systems seen at Formula One races until 2009. But as the Volkswagen Easy on the Environment Among those trading paint with the top three finishers were rally Scirocco R Cup showed, there are other ways to refuel a stars like Markku Alén (Finland) and sporting luminaries such racing car. Gripping racing action, an impressive The Cup Scirocco is indeed one of the as Olympic ski-jumping champion Sven Hannawald (Germany) collection of up-and-coming, veteran, world’s most environmentally friendly and UEFA Champions League winner Jerzy Dudek (Poland). Scirocco R Cup vehicles use special high-grade natural gas and celebrity drivers, and the latest racing cars. Its two-litre turbo was based The full list of competitors was a veritable who’s-who of Russian from Russia that has a specific methane content tailored to their eco-friendly technology: This was the on the sports version of the production motorsport, including Dakar champion Andrey Karginov, Russian engines. The means by which the natural gas finds its way into Volkswagen Scirocco R Cup to which model, the Volkswagen Scirocco R, but champion Andrey Sevastjanov, and Mikhail Lepokov from the those engines are special as well, as Scirocco R Cup vehicles Gazprom was exclusive motor-fuel powered by compressed natural gas Volkswagen Polo Cup. are fuelled neither by their mechanics nor in the pit lane, but by supplier since 2013. (CNG) and optimized for racing. The a mobile tanker located in the driver’s paddock that fuels the vehicle’s CNG engine reduced carbon The Scirocco R Cup and its supporting role in the DTM vehicles with eco-friendly CNG at a pressure of 200 bar. The As the Scirocco R Cup race is making emissions by 80 % while providing up to provided an ideal setting for Gazprom Germania to promote process takes about a minute per vehicle. way for the Audi TT Cup in 2015, Blue 285 PS – more than enough for dynamic the use of natural gas for transport and position it in a positive Fuel takes a look at five successful manoeuvring and white-knuckle speed. light. Alongside its cooperation with Germany’s leading “The natural gas tanker brings 3.5 tonnes of CNG to each and years which culminated in the 2014 motorsport site, www.motorsport-total.de, the company has run every race weekend in the Volkswagen Scirocco R Cup. That’s season’s grand finale at Hockenheim, “Natural gas has enormous potential competitions, streamed races live over the Internet, distributed enough for each of the more than 20 starting vehicles,” Mirco Germany, where South African driver as a means of using motor vehicles flyers, and organized meet-the-press events and expert panel Hillmann, Senior PR and Communications Expert at GAZPROM Jordan Lee Pepper took the title after an in an energy-efficient, cost-efficient, discussions on the potential of the fuel. At the cup showcase Germania, told journalists at the cup’s Moscow event. exciting race. and environmentally friendly manner. in Moscow, media representatives also had the chance to see The Scirocco R Cup showed that the tanker truck that delivered the Russian natural gas used The latest figures from Germany’s Federal Motor Transport “A fantastic day, I’m over the moon. The high performance, eco-friendliness, to power the racing vehicles (see “How CNG Racing Cars Authority show that Volkswagen and Gazprom have their race definitely felt like the longest of my and high emotions are not mutually are Fuelled”). fingers on the pulse: 50 % more CNG vehicles were registered life. The championship in the Volkswagen exclusive,” says Vyacheslav Krupenkov, in Germany in 2014 than in the year before – a trend that Scirocco R-Cup means so much to me, I Senior Managing Director of Gazprom The VW Scirocco R Cup is replaced in 2015 with the Audi TT is expected to continue. “We expect that demand for can’t put it into words,” said Pepper. Germania. Cup, Audi’s second single-make racing series after its Asia- environmentally friendly motor fuels will continue to grow,” says based Audi R8 LMS Cup. The Audi TT Cup will also be held as Hillmann, echoing Gazprom Germania’s plans to be operating Each season featured nine races, each The series’ 25-strong starter grid featured part of the DTM racing championship and is to comprise six over 35 natural gas filling stations in Germany by the end of of which involved 19 up-and-coming a mixture of promising upstarts and races in Germany and two in neighbouring countries. 2015. It’s that growth that the Volkswagen Scirocco R Cup aimed drivers and four racing legends facing motorsports legends, including past to promote. And as former professional ski-jumper and Scirocco off in the world’s only single-make racing participants such as extreme sportsman How CNG racing cars are fuelled guest driver Sven Hannawald put it: “The Scirocco R Cup proved series that showcased vehicles powered Felix Baumgartner, racing icon Nicola that high performance, eco-friendliness, and high emotions are exclusively by natural gas. These engines Larini, and Formula One world champion Everyone knows that cars need to be fuelled, and those built not mutually exclusive.” produce 25% less CO2 than diesel Damon Hill. for racing are certainly no exception. The methods of doing so or petrol-fuelled variants, making the Scirocco R Cup the perfect platform The 2014 series attracted around 200,000 for drawing attention to the benefits of spectators, and the showcase event held natural gas vehicles. as part of the DTM racing weekend at the Moscow Raceway on 11 and 12 July 2014 Gazprom started its sponsorship as – the VW Scirocco R Cup’s first visit to the exclusive motor-fuel supplier to the Russia – proved to be a season highlight. Scirocco R Cup, the world’s only single- 15 drivers took up Gazprom’s invitation to make racing series featuring vehicles race in the Russian capital. After 13 laps powered with natural gas, in 2013. around the 3.91 km Moscow Raceway, it was DTM legend Nicola Larini (Italy) who “Gazprom’s collaboration with crossed the finish line first in the 235PS Volkswagen on the Scirocco R Cup CNG powered Scirocco – followed by sent a strong signal of its commitment ex-Formula One driver Jan Lammers to motorsports that are kind to the (Netherlands) and the Russian favourite, environment without detracting from the WTCC driver Mikhail Kozlovskiy. fun of driving,” says Hans-Joachim Stuck, former Formula One driver and President “My second win in the Scirocco R Cup – of the German Motorsport Association. my young son will be pleased to see the

Continues on page 13

12 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 13 Emissions

March 2015/ Vol. 8/ Issue 1 BLUE FUEL “Blue Corridor-2015” NGV Rally to Hit Ship-to-Ship Transfer: Making the the Road in May Most of GM&T’s Shipping Assets

The eighth international OEM-produced The “Blue Corridor” rally was On 6 December, GM&T completed its first ship-to-ship (STS) How much LNG was transferred and how long did it take? natural gas-fuelled vehicles (NGV) ‘Blue inaugurated by the Gazprom Group in transfer of LNG at sea. Originally loaded on board the ‘Pskov’ Some 133,000m3 of LNG was transferred between the vessels. Corridor’ rally will start its engines on 25 2008. Since 2010, the rally has grown in Spain, the cargo was successfully transferred at sea off This was close to a full cargo, since the Yenisei River’s maximum May 2015 and cross the finish-line on 8 into an event of international scale, the coast of Linggi, Malaysia, to the ‘Yenisei River’. We asked capacity is approximately 152,600m3. The entire operation ¬– June 2015. “Blue Corridor-2015” will cover being joined by a number of players Gordon Young – Marine Superintendent at Gazprom Global from when the Pskov arrived at Linggi until her departure – was an overall distance of 6890 km as NGVs from the European gas market. LNG to explain how such transfers are optimising GM&T’s 63 hours and the actual transfer of LNG took 39 hours. will drive across Europe for 15 days. shipping activities. If you have any questions regarding What are the technical challenges and risks involved? As in previous years, the two major opportunities to participate or Are STS transfers of LNG common practice? The key factors affecting STS transfers are weather and location, organizers of the rally are Gazprom support the “Blue Corridor-2015” rally, The first ship-to-ship (STS) transfer of LNG was conducted both of which are carefully considered during the planning stage Export and E.On Global Commodities. please don’t hesitate to contact the in Scapa Flow, Orkney Islands in 2007. Since then, transfers of the operation. Conditions have to be suitable so that the representatives of the rally’s organizers: between ships in port – where vessels are made fast to a shore vessels can sit alongside one another without risk of damage The participants of the “Blue terminal – have been fairly regular occurrences. Transfers at sea to each other – or the environment. It’s also essential to control Corridor-2015” will drive along the Gazprom Export have been less common, although there’s been an increase in the vapour generated during the operation. This is done by motorways of several European Eugene Pronin these over the last couple of years. consuming the excess by operating the ships generators or by countries. Throughout the rally, tel.:+7 812 346-61-78 burning in the Gas Combustion Units. representatives of the gas and automotive e-mail: [email protected] Why did GM&T need to undertake a STS transfer? industries, politicians, ecologists By conducting the recent STS operation, the Pskov was able What particular safety/security protocols and motor fans will be able to share E.On Global Commodities to complete an additional charter that would have been lost to have to be followed? their views on various aspects of the Andre Schumann a competitor – and the Yenisei River was employed rather than These are much the same as those followed when berthing at a developing NGV market in Europe. tel.: +7 985 767-11-40 being idle. terminal. Guidelines published by the main industry bodies cover e-mail: [email protected] Who decides whether GM&T goes ahead with a transfer – all aspects including safety, communications, manoeuvring the vessels, mooring and unmooring, security and emergencies. and how long does it take to plan? If the cargo on a GM&T-chartered vessel is operated by the What are the commercial benefits to GM&T of STS? GM&T LNG Trading team and there is a commercial need The main commercial benefits lie in the added flexibility STS for such an operation, they would request GM&T Shipping to brings to the chartered fleet. And whilst safety of personnel, the conduct technical and commercial due diligence. environment and assets will always take precedence, future STS operations will further optimise our chartered shipping activities All three functions in Shipping – Chartering, Shipping Operations – and deliver tangible benefits for GM&T’s bottom line. and Technical & Marine Assurance - would jointly carry out the preparations involving external stakeholders: owners of the vessels, STS operators, authorities, agents and, importantly, the Masters and the crews of the vessels involved.

If we in Shipping determine that the transfer can proceed, the final decision to go ahead is made by LNG Trading, after which we carry it out.

December’s operation was planned one month in advance. However, transfers can be planned and executed more quickly, provided safety isn’t compromised. Why was this recent transfer necessary? The LNG cargo was destined for Higashi Ohgishima, in Tokyo Bay, but the Pskov was scheduled to load another cargo in Bonny, Nigeria on 23 December. Without the transfer to the Yenisei River on 6 December, there wouldn’t have been enough time for the Pskov to discharge the cargo in Japan and get back to Bonny in time.

14 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 15 March 2015/ Vol. 8/ Issue 1 BLUE FUEL

It also depends on the type of customer. In the UK, we deal with works. He has the direction and the conviction to steer the Gazprom Energy in the Spotlight two groups: a large broker network and the physical end users. business, not only to build a robust organisation, but to raise That split exists – in varying proportions – across Europe as well. our profile within the Group. In the short time he’s been with us, 7.6 and we’re confident this upward trend we’ve started to see his vision for Gazprom Energy and how he’ll will continue. In the Netherlands we probably have a 50:50 split, in France we conduct virtually all business directly with the physical end take the business forward. Crucially, we’ve made customer user with a very small number of brokers and in Germany we satisfaction a key driver for every approach end users directly as well as online. What does 2015 hold for Gazprom Energy? individual in the business. Customers During 2015 everything will move up a notch with our online have told us they think we’re already Kurt Pederson recently joined Gazprom Energy as CEO. services, marketing campaigns and product lines, so it’s going providing great service, and I think we’re What has he brought to the business? to be exciting. Of course, we’re realistic about what we can the best in the industry. However, I don’t achieve on pricing, but our success has come from continually think the energy industry necessarily has Kurt has a unique understanding of operating at a corporate looking at improving our service, product line and flexibility with a great reputation, so it’s actually more level. He’s joined us from Dong and has experience of being a our systems becoming more efficient. important for us to be good in our own counterparty to Gazprom, so he knows how the organisation right – and incentivise our employees to deliver that. Working with Gazprom Energy – Sheffield Forgemasters International Ltd We asked Jon Feingold, Managing Director What’s been the key to Gazprom of Gazprom Energy to reflect on 2014 Energy’s growth to date? Sheffield Forgemasters manufactures large-scale bespoke Forgemasters explains: “Over the years we have continuously and outline and the company’s ambitions It’s come from building and maintaining steel components for global customers in a wide range of refined our contract until it is effectively a fully-bespoke one.” for 2015. great customer relationships, and industries, including defence, oil and we’ve achieved that by staying true to The relationship has evolved to include additional products gas, power generation and marine. In 2008, recognising that How did the Retail business perform the themes of our customer promise, and services; for example, the company trades all its carbon it needed a supplier that could offer greater flexibility and last year? partnerships, solutions, and simplicity. through Gazprom Energy. support, the company switched to Gazprom Energy. 2014 was another successful year The UK in particular is a very competitive With its in-depth knowledge and expertise, the Gazprom At the heart of Sheffield Forgemasters’ requirement was for Gazprom Energy. As in previous environment; we’ve become a market Energy team acts as its customers’ eyes and ears on the an energy contract that reflected the changing needs of its years, we showed our commitment to leader through consistently giving gas markets. This collaborative partnership, based on daily business. Gazprom Energy’s flexible contract delivers just that customers; giving them good pricing, customers what they want, backed up by communication, is helping Sheffield Forgemasters manage its – and the company now takes all its gas from us. great service and a lot of flexibility. 2014 the very best service and reliability. energy challenges, maximise its profitability and maintain its also saw us continue to build our brand Malcom Lee, Energy and Commercial Manager at Sheffield competitive edge. awareness. I’m delighted to say that Why has that model been so we’ve been rewarded for our efforts: successful? the reviews at the end of the year were Because it’s not just about price, it’s outstanding – particularly around service about offering flexibility and genuine – so we finished 2014 on a high - in 2014 collaboration. If a customer is looking for Gazprom Marketing & Trading Wins ‘Natural Gas House of Gazprom Energy become the second a different type of product or a different largest supplier to type of billing, we’ll find a way to deliver the Year’ Award UK business. it. We want them to feel as if we’re their trusted partner, not just another supplier. On Wednesday 28 January, Richard Pugh, Director of Business Being selected to win the award by the judging panel, which So you’ve got plenty of happy Of course the price is the hook, but if you Development at Gazprom Marketing and Trading - collected the consisted of industry experts and specialists from several ‘Natural Gas House of the Year’ customers? fail to impress beyond that, you won’t award for at the European Gas top institutes, research bodies, and universities highlights Conference held in Vienna. that the fruits of our contribution to the gas markets are In 2013 our average customer satisfaction keep the business. being recognised.Other award winners included Fluxys for rating was 7.9 (out of 10) and in 2014 it Gazprom Marketing and Trading was selected by a panel Storage Operator of the Year and Eustream for TSO of the year. increased to 8.1. Our smaller customers How does your approach vary of judges based on a number of criteria, including: Being are the most satisfied, thanks to the between markets? recognised as a leading player in structured trading and straightforward, hassle-free service we Every market is unique, so we employ origination provide. Satisfaction among our third different techniques when selling to party intermediaries also increased different countries. So far as the back • Adding value to the European in 2014. In July, our rating from these office is concerned, all retail activity is gas markets partners was only 7.1, so we made a pretty similar – but when it comes to the concerted effort to improve our service to front office, it’s all about the relationship, • Securing access to major markets and key trading them in the second half of the year. In just and that’s where a tailored approach counterparties in Europe six months, the satisfaction score rose to is required. • Channelling volatility and optionality across the value chain

Continues on page 17

16 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 17 March 2015/ Vol. 8/ Issue 1 BLUE FUEL

E-world 2015 800.00 and the actual absence of alternative import sources, not even 700.00 the active replacement of gas-fueled power generation in the 600.00 last three years has managed to reduce Russia’s gas market For the third year running, Gazprom of the fair with more than 200 delegates share in Europe. In order to drastically reduce the market share 500.00 Marketing and Trading (GM&T) took a joint attending. Two branded vodka ice 2010 of Russian gas, Europe would have to not only cut its gas stand with Gazprom Energy at E-World sculptures were in the centre of attention 400.00 2013 consumption, but ensure that these cuts outpace the domestic in Germany, one of the leading European – and generated a lot of buzz around our 300.00 production decline. energy fairs. stand during the afternoon. 200.00 The 15th E-world energy and water trade This event gave both GM&T and Gazprom 100.00 A new report from the National Energy Security Fund, Russian fair and congress took place between Energy a fantastic opportunity to make 0.00 Gas in the EU: Replacement Feasibility and Costs, analyzes the Oil Gas Coal Nuclear Renewables Other* 10-12 February, at the conference center in new connections and catch up with peers, state of the EU’s energy balance, along with gas supply and Essen, Germany. industry experts and leading suppliers. It EU-28 primary energy consumption balance in 2010 and 2013 (bn consumption structure in four EU regions (North-West, South- is also a platform for both companies to cubic meters of gas equivalent) West, North-East, and South-East), over the period of 2010- More than 600 exhibitors from across 25 promote their energy solutions. 2013. Our findings show a noticeable decrease in gas’ share of nations participated, including e.on, BP, 100% the energy balance only in Britain and Denmark – gas producer Dong Energy, GDF Suez, Statoil, Shell, 90% nations, which have seen their domestic gas production fall General Electric, Siemens and many more. 80% rapidly in recent years. 70% Renewables Over 20,000 trade visitors, experts and 60% decision takers attended the 3-day event. 50% Nuclear What’s more, all this is accompanied by yet another 40% Coal As in previous years, GM&T and Gazprom 30% phenomenon: growing demand for Russian gas in North- Energy had a high profile presence this 20% Gas Western European countries, which up until 2013 had managed 10% Oil year, with around 50 specialists attending 0% to meet their own needs without resorting to net imports from from Gas, Power and Carbon Trading as North-‐Western South-‐Western South-‐Eastern North-‐Eastern Russia at all. Last year, this was caused by some technical Europe Europe and Central Europe well as from our retail business. A drinks Europe problems with gas supply from Norway – this region’s main reception was held on the first evening import source – in conjunction with the European LNG market’s EU primary energy consumption balance in 2013, by region (%) depression due to unsuccessful competition with Asian buyers. It could well become a long-term trend, however, especially if the EU brings its CO2 emission quota regulation into line with its 250 Russian Gas in the EU - own “green” guidelines. Right now this market is not only failing 200 to stimulate the replacement of “dirty” fuels, especially in the Is Replacement Feasible? Residen-al and minor energy industry and power generation, but is actually leading to 150 consumers a coal renaissance in Europe. its Western partners, current and Power genera-on prospective sanctions, and a climate of 100 The consumption structure for primary energy sources in the EU Industrial and other mutual distrust make these discussions is fairly slow-changing. Oil accounted for 34% of consumption in 50 increasingly pertinent – and a direct 2010, natural gas for 26%, coal for 16%, nuclear power for 13%,

threat to the mutually beneficial gas 0 and renewable energy sources – including hydroelectricity and sector cooperation, which has developed 2010 2011 2012 2013 biomass (wood) – for 10%. Last year, oil’s share of the balance between Russia and Europe ever remained unchanged; the share of natural gas and nuclear Gas consumption in EU-28 countries by consumer group since the Cold War era and has proven power fell by 1%, coal rose by 2%, and renewable energy (bn cubic meters) fundamentally positive for over 40 years. sources rose by 1%.

600 Be that as it may, the opinion that the EU As for hydrocarbons in general, Europe’s dependence on should stop or reduce its use of Russian 500 nonrenewable energy sources (other than uranium) has not only gas is being heard quite regularly. When failed to decline as EU strategists wish, but has actually risen 400 Gas it comes to specifics, however, no one to 77%. Only a third of this total is made up of the cleanest Lignite has a recipe for replacing the 25-30% of 300 fossil fuel: natural gas. Gas has been the chief target of attack. Coal EU gas demand presently met by supply 200 In the last three years, its consumption fell by nearly 70 bcm By Alexei Grivach, Deputy Director of the from Russia. Amid the decline in the EU’s Renewables* (over 13%). Meanwhile, oil – the most expensive energy source, National Energy Security Fund (Russia) domestic gas production, already limited 100 double the price of gas in Europe – lost just 8% (56 bcm of gas to a few countries (only eight of the EU- 0 equivalent, or around 51 million tons), while consumption of Russian gas and its place in the 28 can meet at least 10% of their own 2010 2011 2012 2013 “dirty” coal actually rose by 11 bcm of gas equivalent. European Union’s energy balance needs, and only two – the Netherlands are always high on the agenda of any and Denmark – are net exporters of gas), EU power generation fueled by gas, coal, lignite, and renewables discussion of European energy security. (thousand GWh) The crisis in Moscow’s relations with Continues on page 19 Continues on page 20

18 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 19 March 2015/ Vol. 8/ Issue 1 BLUE FUEL

250 Others 160 250

Austria 140 200 200 Russia Hungary 120 Norway 150 150 Croa7a 100 Algeria (pipeline) Capacity (bcm per year) Poland 80 100 100 Libya UGlizaGon in 2013 (leJ scale), % Denmark 60 50 40 Turkey 50 Italy LNG 0 Germany 20 EU U.K. 0 Spain Italy* 0 France Greece Romania Portugal Belgium 2010 2013 2015 2020 2025 2010 2011 2012 2013 Netherlands

EU gas production forecast (bn cubic meters) EU gas imports (bn cubic meters) EU regasification capacity utilization in 2013

Most of the drop in gas consumption and thousand cubic meters of gas equivalent market-priced surcharge, or if market conditions change. Yet across EU regions is extremely uneven. Russian gas makes up energy balance share was recorded in the more than imported bituminous coal, this is not an attractive instrument for supplementing the EU’s practically all supply to the North-East, and is also dominant in countries of North-Western Europe (down while the CO2 emissions quota market gas balance under normal conditions – at least, not as long as the EU’s South-East. Until recent years, LNG ruled in the South- from 32% in 2010 to 27.5%). But in South- has effectively collapsed, failing to drive LNG demand in Asia-Pacific remains high and expansion of West. The North-West region has two major pipeline supply Eastern Europe, the leading Russian gas replacement of dirtier energy sources. production capacities worldwide remains slow. sources, as well as the capacity to meet most of its own gas consumer, gas is very close to displacing needs from domestic production. oil from the top of the energy balance The EU’s domestic gas production Directing just 20-30 bcm of Atlantic LNG to Europe would sheet: 32% in 2013, up from 30%. decline is a fundamental long-term trend. mean an additional $2.4-3.6 bn a year in direct costs. It would Only the North-West region can reduce supply from Russia EU gas production has fallen by 34 bcm also increase the total cost of all imported gas by around $36 relatively easily to 10% of its needs (20-30 bcm) – primarily by Gas demand in the EU residential sector (17%) in the last three years alone, and bn, since contract prices are highly sensitive to the pricing of halting its own reverse supply to the East. This would, however, showed a negligible decrease. Industrial is set to lose a further 70 bcm by 2025 alternative import sources. only increase Russian gas demand in the EU’s Eastern regions. sector figures remained enviably stable (down 43% from 2013). over three years. The EU gas sector’s And even if this LNG did replace Russian gas, Gazprom’s EU In the EU’s East, both Northern and Southern parts, the reserve primary losses are in power generation: At the same time, Europe has no chance gas sales revenues would grow by $5 bn relative to the status capacities for increasing supply from other sources are minimal a fall by 53 bcm (35%) since 2010 to 97 of securing any significant increase in quo. Since reducing energy prices is a priority for the EU, this to be able to compensate for Russian gas purchase reductions bcm in 2013. In 2011, gas-fueled power pipeline gas supply to replace Russian approach does not appear to be an attractive instrument for or even any force majeure circumstances involving gas transit generation decreased by over 16 bcm gas without changing Iran’s ‘isolated partially replacing imports from Russia. across the territory of Ukraine (practically all gas is supplied (11%); this decline accelerated to 17% (22 nation’ status. Algeria is already making via the Ukrainian gas transportation system). LNG terminal bcm) in 2012 before slowing slightly to intensive cuts to its pipeline gas exports Along with Europe’s overall high gas import requirements, it construction in Poland and Lithuania will only increase energy 12.5% (14 bcm) last year. to Europe, primarily to Italy. Norway is is also worth noting that the distribution of supply sources costs for consumers in those countries. approaching the production and export Most of the gas consumption decline – limits of its existing resource base; it is 39 bcm – in EU power generation was likely to enter the production decline The Future of Oil and Gas Projects recorded in Western Europe’s most phase by the end of the decade. In the advanced economies (Britain, Germany, Caspian region the EU has managed to By Satoru Madono, lead to a production increase and adapt business strategies to Italy, Spain, and France). They also reserve just 10 bcm in Azerbaijan, and Founder and CEO of IJIC, this pessimistic scenario. accounted for the highest surge in coal these volumes will not be available to the an international business use. Coal consumption in these countries Europeans until sometime around 2025. consulting boutique (Japan) Paradoxically, despite overwhelming pessimism, uneasiness went up by 17 bcm of gas equivalent from and even skepticism over existing oil and gas business models, 2010 to 2013: around 44% of the drop in The EU’s LNG regasification capacities Project timeframes and my instinct, which is based on over forty years of experience gas-fueled power generation. are significantly underutilized. On the one pessimism in the financial services industry, however, suggests that hand, this indicates that the European opportunities are here and we should move in the opposite The displacement of gas by a market, in its current state, is not Pessimism has been direction to what the majority of people views as the way to combination of coal and renewable attractive to LNG suppliers – including hanging over oil and go. Project bubbles are gone and so are those pretentious energy sources is even more apparent. European companies contracted to gas projects as negative professionals attached to those bubbles. It is time to select truly In 2010-2013, electricity output from purchase LNG from producers under factors have been piling up: valuable projects that are competitive far into the future. gas-fueled power plants fell by 157,000 long-term contracts. On the other, by plummeting oil prices, sanctions, suspension of challenging GWh (-29%). Coal-fueled power plants default, this gives the EU some reserve projects, increasing volatility in foreign exchange markets, Imagine normal timeframes of oil and gas projects, which increased electricity output by 130,000 capacity for increasing its LNG imports slower growth prospect of the global economy. In this gloomy stretch far beyond ups and downs of prices and economic GWh (+42%) in the same period. This in force majeure circumstances, with a environment industry observers call for a stop of projects that cycles, election cycles and negativity hanging over us. is because gas costs around €200 per Continues on page 21 Continues on page 22

20 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 21 March 2015/ Vol. 8/ Issue 1 BLUE FUEL

Good projects live long. Whether we like in London as a director general of project logistical bottlenecks, lack of intelligent operations and failures changed as drastically as they remain large-scale nature. or not, pessimism and optimism come finance of JBIC signing an agreement to in providing diverse solutions for consumers, which in turn However, the oil and gas production platform of the future and go within the lifecycle of a project. provide Sakhalin LNG with financing. The would have eliminated possible rival projects. may be bulky, but it is smart as innovative energy and Take the current oil price volatilities as initial Sakhalin oil development project telecommunication technologies are going to be embedded. But an example: the oil price will bottom had been transformed into an LNG Projects studies will be much more important than in the past, such a combination cannot be achieved without the cooperation out once it will go down to such a level project in a little over two decades! since the project paradigm has been changing drastically as of parties with very different resources and backgrounds. The at which a large number of US shale innovation will accelerate within the energy industry. Innovations mere question of which alliance partner will fit into each project producers are unable to operate. Such Time to Enrich the Project Concept make project participants more visionary and at the same time scenario will require significant consideration. However, let’s a price would be around the average will force projects to provide better solutions to society by not waste time with pessimism hanging over us. It is time to find variable cost of shale producers, with For many projects the time actually spent being integrated into a number of other projects. Projects could strategic alliances that create project concepts that survive far which there will be no room for any on preparation is not so substantial. be combined with innovative logistics, downstream and other into the future. producer to accommodate the repayment It is never a matter of decades. If industrial developments, creating an entire set of development of debts. Then the price will bounce intensively pursued, even for mega- projects. Efficient project integration is costly and accompanied My recommendation is a Russian and Japanese alliance, which back quickly. How long will it take? A few projects, feasibility studies and financial with a substantial investment risk. However, risk can be is sure to be most productive, have an extensive market and years at the most, but likely it will take negotiations could be completed within mitigated thanks to global standardization in prices and cash resources, while being rich in human capital. When most are in far less time. a few years. What happens in between a flow mechanism, based on which investors can forecast better. despair, it is time for real professionals to continue what is right few decades and a few years? Workloads in the long run. As for myself, just after the first global come and go intermittently, only to Though innovations have been changing societies and energy crisis, as a young loan officer of provide opportunities for financiers to miniaturization has taken over, oil and gas projects have not the Export-Import Bank of Japan-JEXIM, deal with many projects in parallel, which the predecessor institution of JBIC, I was what I did. For investors it should be was in charge of possible financing for time for real project enrichment. Gazprom’s Buddy Card a Sakhalin oil development project. The project company SODECO (Sakhalin According to my experience, Gazprom’s sponsorship of German Bundersliga football team cater to the interests Oil Development Company) had been disproportionately to a long lead time, Schalke 04 goes beyond logo placement on players’ jerseys and of the fans, while established under the sponsorship of project studies have all been short and banner advertising to include campaigns that are more closely raising awareness the powerful Japan Business Federation. that is true even for successful projects. If related to natural gas. One such campaign this season has been of the benefits of However, the project was not followed more substantial studies had been done quick to get the attention of Schalke 04 fans. natural gas. through as originally scheduled, primarily with future developments appropriately because natural gas instead of oil was considered, successful projects would The Gazprom Buddy Card campaign saw Schalke 04 fans The subject of discovered. The business was stuck and have been even more successful. They take an online quiz and the first fan who answered ten tricky natural gas in the project was shelved. But that was would have overcome technological gaps, questions won the Gazprom Buddy Card, which entitles them transport was not an end of the story. After a little over to admission to all Schalke 04 matches for themselves and a brought to the fore two decades, in April 1997, I was sitting Continues on page 23 buddy. The card comes with VIP travel to international away during the first round games played in the Champions League, including transport on of the Gazprom the team jet and accommodation at the team hotel. Buddy Card challenge. Gazprom’s commitment to natural gas in transport The holder of the Gazprom Buddy Card faces a new challenger is a significant contribution to ensuring that mobility moves at regular intervals and has to defend their card. The challenges with the times, while being kind to both the environment and are overseen by well-known members and supporters of your wallet. There are now over 100,000 natural gas vehicles on Schalke, forging a real connection between the club and its the road in Germany, and that number continues to rise. One sponsor. The challenges are also designed to draw attention important factor supporting that growth is the expansion of to natural gas-related issues. In the first round, challengers Germany’s network of natural gas filling stations. With around travelled in the Gazprom Buddy Taxi, a Volkswagen car fuelled 900 filling stations nationwide, the infrastructure is in place – and by natural gas, driven by Schalke celebrities including Schalke is being expanded on an ongoing basis. Gazprom is contributing stadium announcer Dirk Oberschulte-Beckmann. The winner of to that expansion via its German subsidiary Gazprom Germania, the Gazprom Buddy Card was also allowed to drive the Gazprom which plans to expand its natural gas filling stations to a total Buddy Taxi himself. Natural gas was, of course, one of the topics of 35 in 2015 – an effort that Timo Vehrs, Gazprom Germania’s covered in the competition for the Gazprom Buddy Card, with Director of Business Development, discussed with Gazprom a healthy knowledge of natural gas essential to winning the prize. Buddy Card contestants.

As German newspaper Handelsblatt pointed out, the Gazprom For more information, visit: Buddy Card is a textbook example of delicate, fan-oriented www.Gazprom-football.com/kumpelkarte activation. Gazprom’s sponsorship of Schalke 04 is designed to http://youtu.be/6HQd3kSUQoQ

22 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 23 March 2015/ Vol. 8/ Issue 1 BLUE FUEL Gazprom Germania Presents Synergy in Music in Singapore the 10th Russian Film Week in Berlin A gala performance by Russian musicians in Singapore marked the latest success of Gazprom Export’s Synergy in Music series. The Russian Film Week in Berlin The festival opening saw actors, celebrated its 10th anniversary between directors, and screenwriters walk the The Synergy in Music project, launched in 2012, is part of 26 November and 3 December 2014. The red carpet into Berlin’s Kino International Gazprom’s initiative to forge deeper intercultural bonds between festival, which was held in association cinema. The Ambassador of the the flourishing Singapore art scene and Russia’s rich heritage with Gazprom Germania, again featured Russian Federation was also on hand to of classical virtuosity. It aims to improve the cross-cultural the latest Russian films of all genres in the greet the Moscow delegation and 300 exchange between Russia and Singapore as well as Asia- original Russian with German subtitles. representatives of business, government, Pacific countries. society, and culture at a reception. What began as a modest, but The latest Synergy in Music event brought six of Russia’s finest enthusiastic celebration of Russian Supporting the arts and culture musical talents - Alexander Buzlov, Tatiana Samouil, Evgeny film has long since become one of the has traditionally been an important Rumyantsev, Andrey Usov and Igor Naidin – to Singapore. Led highlights of Berlin’s film festival calendar component of Gazprom Germania’s by world-renowned and multiple award-winning violinist, Vadim also held a multi-day series of master classes for students of the – with growing interest and visitor social sponsorship activities. The Repin, the musicians brought timeless classical pieces to life Yong Siew Toh Conservatory of Music Schools and other local numbers that speak for themselves. No Russian Film Week Berlin is organized at an exclusive one-night-only gala concert at the beautifully music students at the School of the Arts (SOTA). other festival in Germany offers such a by Interfest and has been supported by refurbished Victoria Concert Hall in Singapore. comprehensive, compelling window into Gazprom Germania since its inception Also in 2015, music lovers across Asia will get a chance to contemporary Russian film. The Russian and also provides sponsorship to young The proceeds from the concert were used to support the experience the best of Russia’s classical virtuosity as a number Film Week shows audiences in Berlin an film-makers and German-Russian Singapore International Violin Competition. of Synergy in Music events are planned throughout the year, image of modern Russia and everything student projects. strengthening cultural exchange both on and off stage. it has to offer in a way that only film can, Synergy in Music 2014 was also marked by significant creating a cultural bridge between Russia For more information visit educational value. During their stay in Singapore the musicians and Germany. www.russische-filmwoche.de GM&TS Supports Russian Language Studies

Gazprom Marketing & Trading Singapore (GM&TS) proudly supports the Russian Language Center in Singapore as part of its support for Russian culture and language promotion in Singapore.

GM&TS’ financial backing will allow the creation of a library at the Russian Language Center which will include textbooks on Russian language, literature, history, culture as well as Russian classical novels and poetry, and materials for bilingual children. Thanks to the donation by GM&TS the library’s books can be used by local readers interested in Russian language and culture as well as by school children from Russia and former Soviet states who study in Singapore.

“The Russian Language Center was established in 2008 and the main problem since then was the lack of educational materials and opportunity to acquire books in Russian in Singapore. We would like to thank Gazprom Marketing & Trading Singapore and its General Director Sergei Edrenkine personally for their support in purchasing the books for our library,” said Ekaterina Drozdova, Director of Russian Language Center in Singapore.