Russia will invest over $400 billion in the development of its gas sector by 2030, Energy Minister Sergei Shmatko said on Monday.
"In general, the volume of investment until 2030 is estimated at 12.3 trillion - 14.7 trillion rubles [$412 bln-$493 bln] in fixed prices as of January 1, 2010," Shmatko told a meeting on gas industry development until 2030.
He also said that under a general gas sector development plan, Russia's annual gas production would increase to one trillion cubic meters from 650 billion by 2030.
Prime Minister Vladimir Putin confirmed at the conference that Russia can increase its gas production to one trillion cubic meters per year from 650 billion cubic meters.
"We are to increase gas output to one trillion cubic meters per year from the current 650 bcm, a nearly 50% growth. We have all the possibilities to do so," Putin told the meeting without mentioning the timeframe.
Russian energy giant Gazprom CEO Alexei Miller said the prospect of increasing the gas production to 1 tcm by 2030 is quite real.
"The market potential is huge, and we are convinced of the gas prospects. The figure is absolutely real," he said.
Putin ordered the government on Monday to consider privileges for gas companies working on the sea shelf and in the liquefied natural gas (LNG) sphere.
"We should think about tax privileges for companies, which are engaged in new gas projects. For example, companies working on the shelf and in the LNG sphere cannot do without such privileges," the premier said.
"I have just signed an order to the Finance Ministry and the Economic Development Ministry to make corresponding proposals. The mechanism of granting the privileges is formulated there."
Shmatko also said Gazprom will consider cutting transportation costs.
"Cutting transportation costs is a key issue in Gazprom's competitiveness. To secure Russian gas competitiveness, we must work seriously, otherwise it would be difficult for us to supply gas further than Germany," he told Putin.
"There was such an order and we are preparing documents, which we will consider at a Gazprom board of directors' meeting," Shmatko said.
Shmatko said Russia's gas exports may increase to 455-520 bcm by 2030.
"Under our general plan, gas exports may amount to 455-520 bcm by 2030," Shmatko said, adding that now gas exports stood at about 226 bcm per year.
Miller said at the gas meeting that Gazprom thinks it is necessary to cancel the mineral extraction tax and cut export duties on gas extracted in East Siberia, the Yamal Peninsula and on the shelf.
"As for the gas extracted in Yamal, East Siberia and on the shelf, I think it is appropriate both to cancel the mineral extraction tax and to cut export duties for the gas produced in these regions," Miller said.
Tax privileges now cover exhausted fields and fields of the Black Sea and the Sea of Okhotsk, while export duty benefits cover East Siberian fields.
Deputy Finance Minister Sergei Shatalov said the ministry had supported the idea of canceling the tax on gas extracted in Yamal, which would be used for the production of liquefied natural gas until the fields reach a 16-17% margin level.
Russia has not increased the mineral extraction tax on gas since 2006. The government plans to increase it by 61% in 2011, by 6% in 2012 and by 5.4% in 2013.
Miller also said Gazprom has contracted 216 billion cubic meters of gas annually up to 2030, with 172 bcm contracted under take-or-pay terms.
"172 billion cubic meters of gas are under take-or-pay terms, while 216 billion cubic meters are the overall annual contracted volumes of gas. Consumers may not buy less than 172 billion cubic meters," he said.
"Gazprom will maintain such supply volumes up to 2030," Miller said.
Deputy Prime Minister Igor Sechin, in charge of the fuel and energy sector, told journalists that a master plan to develop the gas industry until 2030 will soon be adopted.
"There are no differences on the general plan. The basic parameters have been agreed," he said.
NOVY URENGOI, October 11 (RIA Novosti)
