Conversation between President Medvedev and Gazprom CEO

I would like to recall that last year when we supplied gas to Ukrainian consumers for 179.50 dollars, that same gas was actually sold to them at a price of 320 dollars per thousand cubic metres. And all this margin went straight into the pockets of certain unknown structures, structures that most likely represent corrupt interests. And very likely the money from these transactions was used to achieve certain political goals or to solve personal problems. This is very sad because it empties the pockets of ordinary Ukrainian consumers – people who we care about, people who are close to us. Incidentally, they must know that Gazprom delivered gas at one price, and that the price in Ukraine was almost double this throughout the year. We need to speak openly about this and our European colleagues need to know this.

ALEXEY MILLER: Of course in this situation the question to ask is: where is the money?

DMITRY MEDVEDEV: Yes. I can pretty well imagine where the money is, and unfortunately this is not a good thing for anybody in Ukraine. Well, what do you hope to do in the near future?

ALEXEY MILLER: In the course of the day we expect to sign a protocol on the establishment of an independent international mechanism to support the transit of Russian gas through Ukraine. And as soon as we do so we will resume deliveries and transit for our European customers.

DMITRY MEDVEDEV: That is right. Naturally we are interested in seeing transit resume as soon as possible. Nevertheless, I would like you to perform this task with one of my requests in mind: all these actions can be taken only after signing the documents. Unfortunately, we have no faith in the good intentions of the Ukrainian side. We will act only according to signed documents. Otherwise such an irresponsible policy and theft, theft which has been going on for many years, will never stop.

However, life continues. I would like you to report to me on the situation in our country. How is our gas transmission system operating? Because it is now winter and this is always a difficult time of year. We have prepared and are now implementing a very good programme for bringing gas to Russian regions. What has been done and what remains to be done in this area?

ALEXEY MILLER: The gas transmission system in Russia is up and running. All consumer demands are being satisfied fully and regularly. Gazprom continues to implement its programme for bringing natural gas to Russia. When we started it, Dmitry Anatolyevich, gas was being delivered to 25 regions – they now number 68.

DMITRY MEDVEDEV: Including in the Far East.

ALEXEY MILLER: Yes, of course. We are now moving into the Far East, Eastern Siberia, the Kamchatka Peninsula and Sakhalin Island. And although the financial crisis has obviously raised difficult questions about financing these projects, Gazprom is absolutely confident about its financial plan. The company has maintained its pre-crisis investment programme for 2009 in terms of supply. I can assure you that all the challenges Gazprom faces in its priority construction projects – and this also applies to those that have been much in the news of late, the North Stream pipeline under the Baltic Sea, the Bovanenkovo-Ukhta gas trunkline system, the extraction of gas in the Yamal Peninsula [West Siberia], the development of the Bovanenkovskoye oil and gas condensate field, and the creation of a new resource base for Russia in the Yamal Peninsula – I can assure you that all these goals and objectives that Gazprom has set for itself in 2009 as part of its investment programme will be implemented.

With regard to the population and utilities sector, the system is working smoothly, and we are increasing the gas supply in those areas where it has recently been colder. Russia's gas transportation system is set up in a way that ensures great endurance and stability. This system is recognised by international experts as the most reliable transmission system in the world. From a single complex in Moscow, we can optimise working conditions and extraction, transport and storage, and the distribution of gas. This allows us to supply gas to the regions where current weather conditions mean extra supplies are required, where they need more gas.

DMITRY MEDVEDEV: Good. Of course this means that for us the biggest priority is to develop our gas transportation system and ensure supplies to our people, including our villages, our rural population, because there the gas situation has always been quite difficult.

As for the future, as we discussed when I was on Gazprom's Board of Directors, we need to think, on the one hand, about how to ensure the supply of gas for export to Europe under normal conditions. This is where our closest partners are, the consumers who have made their plans based on the supply of gas from Russia, the countries that have for a long time now worked with Russia and Gazprom. But we should also think about the future for gas supply in other areas, since the challenge of diversifying the pipeline system is so topical and there is a lot of demand in a number of Asian countries. I believe that we must move in this direction. It would be beneficial for our country and for Gazprom as Russia's largest company, and would help deal with the problem of ensuring energy security in the world.

ALEXEY MILLER: Gazprom's strategy will be to continue to work on the diversification of gas transportation routes and on the creation of transport corridors, such as North Stream and South Stream, a new gas pipeline under the Black Sea going directly to Bulgaria from Russia.