Mr Medvedev of Gazprom believes that by 2020, Russia's share of the European gas market will increase from 26% to 33% "because local production is going down and demand is increasing".

Check this out! Russia is set to expand into the US market.

Gazprom targets 5%-10% share of US gas market by 2020

http://www.platts.com/Natural%20Gas/...

Moscow (Platts)--9Jun2009

Russia's state-controlled gas giant Gazprom sees its share of the US gasmarket increasing to 5%-10% by 2020, up from 0.5% now, said Gazprom deputy CEO Alexander Medvedev Tuesday.

"With the Shtokman and Yamal LNG projects, the share (of US gas consumption) may grow up to 5%-10%," he said on the sidelines of a conference in Moscow.

Gazprom plans to start LNG supplies from the Shtokman project in the Barents Sea in 2014, targeting mainly the North American market. Gazprom is also considering an option to build an LNG plant on the Yamal peninsula in Russia's north, from where it also wants to supply North America.

Under a gas swap deal signed with Shell in April, Gazprom has the ability to send up to 1 million mt/year of LNG, or about 128,000 Mcf/d to the US from the Sakhalin 2 plant on Russia's Sakhalin Island. Medvedev said these supplies, which are shipped to the US through Sempra Energy's import terminal in Mexico, account for 0.5% of the US gas market.

The US currently consumes about 22 Tcf of gas annually, he added. "At Gazprom, we regard North America as an attractive market with solid growth prospects," Medvedev said at the Shell executive workshop in Moscow.

Gazprom expects global LNG demand to grow at an average annual rate of 6% to 8% for the next few years, despite the recent economic downturn, Medvedev said.

At the same time, Gazprom believes there will be limited supply additions for LNG in the next two to three years, as some market players may postpone investments under lower crude prices. "As demand recovers, this may lead to a situation of relative LNG supply shortages as early as 2014-2015 onwards," Medvedev said. Long-term, between 2015 and 2030, Medvedev said worldwide LNG demand forecasts will be influenced by demand for conventional natural gas.

"On the LNG side, these factors mainly include the development of construction costs for LNG capacities, the financing of the development of large new discoveries of so-called remote gas, and the exploration/production performance of domestic unconventional sources in large markets such as the US."

Daniel Yergin, chairman of Cambridge Energy Research Associates, when asked about prospects for Gazprom taking a share of up to 10% of the US gas market, also said it was a question of competition between LNG, either from Russia or any other sources, and unconventional gas.

--Anna Shiryaevskaya, anna_shiryaevskaya@platts.com

Similar stories appear in Platts International Gas Report. See more information at http://igr.platts.com