Gazprom Unable To Implement Investment Program Due To Low Gas Tariffs

Given the increase in the gas price on the local market by 35%, it will be impossible to implement the company's investment program, despite its reduction to 140 billion rubles (about $4.6 billion) in 2002, Gazprom Executive Board Deputy Chairman Alexander Ryazanov told reporters at a news briefing in Moscow. He pointed out that Gazprom plans to produce 520-530 billion cubic meters of gas in 2002, whereas the volume of its investment program is 160 billion rubles (about $5.2 billion). Nonetheless, according to him, all experts and a majority of Duma deputies now support Gazprom's position that the domestic gas price is not in accordance with the expenditures on its production and transportation. Yet, as Ryazanov pointed out, the company has the goal "to maintain the planned volume of gas production." In his view, the domestic gas price should reach $40 per 1,000 cubic meters in 3-4 years. Ryazanov also stated that Gazprom grants 95% of independent producers' applications for using its gas transportation network, but the company still has a monopoly on gas export. Answering the question of the relations between Gazprom and SIBUR, he said "SIBUR remains our subsidiary, and what is now happening to it is not related to Gazprom's attitude to it."

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