March 29 - Russia's Gazprom is ramping up its presence in Asia to trade liquefied natural gas, oil and source carbon offsets, as one of the world's biggest energy players seeks to tap the fastest-growing region.
Gazprom formally launched its first commercial office in the Asia-Pacific on Monday.
The Singapore office plans to have more than 30 staff by year end, up to 8 of them developing carbon offset projects and sourcing carbon credits, Arthur Tait, managing director of Gazprom's marketing and trading office in Singapore, said in an interview.
Tait also said the firm was not looking to sign additional long-term LNG supply contracts for the moment and that there was enough flexibility in production at Gazprom's Sakhalin-2 plant to be able to sell about three spot LNG cargoes per month.
"At the moment we have enough of a proportion on long-term deals," he said, adding it was easy to sell any excess production on the spot market in Asia. "We've started to sell a few cargoes into India and China," he said.
The plant operated by Sakhalin Energy is on the southern tip of the Pacific island of Sakhalin, a two-day voyage from Tokyo. Its two processing trains combined have capacity to produce 9.6 million tonnes per year of LNG.
Sakhalin Energy is majority owned by Gazprom. Shell retains a minority stake, along with Japan's Mitsui and Co and Mitsubishi Corp.
The company sells much of the output to Japan and South Korea on long-term contracts. It also has a supply contract with Mexico that contains flexible options, meaning the company can decide when it wants to sell cargoes to that country, Tait said.
CHINA HOPES
While India was potentially a big buyer given the burgeoning demand for electricity there, Tait thought China was a better option as a spot cargo customer given the global slump in gas prices.
"I would see a lot of demand coming from China," he said, adding he thought it was realistic for Chinese power generators to switch to gas from dirtier coal at current prices.
He said Singapore was a good regional base for LNG trading and sourcing carbon offsets from U.N.-backed clean-energy projects, which could be sold to big polluting firms in Europe or Japan to help meet mandatory emissions reductions targets.
"By the end of the year we should have around 30 to 34 staff across all the products -- LNG trading, carbon, oil trading, FX trading and back-office functions," he said.
Between 7 and 8 staff would help develop carbon offset projects and signing offset purchase agreements from projects under the Kyoto Protocol's Clean Development Mechanism, or CDM.
Under this scheme, investors in wind farms and other clean energy projects in developing nations can earn offsets that can be sold for profit or to meet emissions targets in rich nations.
Tait said while Gazprom was a latecomer to the market, he saw good potential in building a large portfolio of CDM projects to meet demand from customers in Europe and Japan, which need offsets to meet targets under Kyoto or Europe's emissions trading scheme. Japan is also discussing national CO2 trading.
The project portfolio would serve demand from utilities, steel mills and other big polluters well after Kyoto's first commitment period ended in 2012, he said.
This is despite concerns over the future of the CDM given the failure of last December's Copenhagen climate talks to clinch a tougher climate pact to succeed Kyoto from 2013.
"Our gas and power portfolio is massive so to trade around that we would definitely need more (projects)," Tait said, adding carbon trading had a future. "There will be a carbon market whatever it is."
Last year, Gazprom signed up about 25 projects and a further 11 so far this year, Tait said. He expected that figure to grow at between 2 and 3 per month this year, each yielding in the range of 150,000 and 200,000 offsets annually.
Gazprom formally launched its first commercial office in the Asia-Pacific on Monday.
The Singapore office plans to have more than 30 staff by year end, up to 8 of them developing carbon offset projects and sourcing carbon credits, Arthur Tait, managing director of Gazprom's marketing and trading office in Singapore, said in an interview.
Tait also said the firm was not looking to sign additional long-term LNG supply contracts for the moment and that there was enough flexibility in production at Gazprom's Sakhalin-2 plant to be able to sell about three spot LNG cargoes per month.
"At the moment we have enough of a proportion on long-term deals," he said, adding it was easy to sell any excess production on the spot market in Asia. "We've started to sell a few cargoes into India and China," he said.
The plant operated by Sakhalin Energy is on the southern tip of the Pacific island of Sakhalin, a two-day voyage from Tokyo. Its two processing trains combined have capacity to produce 9.6 million tonnes per year of LNG.
Sakhalin Energy is majority owned by Gazprom. Shell retains a minority stake, along with Japan's Mitsui and Co and Mitsubishi Corp.
The company sells much of the output to Japan and South Korea on long-term contracts. It also has a supply contract with Mexico that contains flexible options, meaning the company can decide when it wants to sell cargoes to that country, Tait said.
CHINA HOPES
While India was potentially a big buyer given the burgeoning demand for electricity there, Tait thought China was a better option as a spot cargo customer given the global slump in gas prices.
"I would see a lot of demand coming from China," he said, adding he thought it was realistic for Chinese power generators to switch to gas from dirtier coal at current prices.
He said Singapore was a good regional base for LNG trading and sourcing carbon offsets from U.N.-backed clean-energy projects, which could be sold to big polluting firms in Europe or Japan to help meet mandatory emissions reductions targets.
"By the end of the year we should have around 30 to 34 staff across all the products -- LNG trading, carbon, oil trading, FX trading and back-office functions," he said.
Between 7 and 8 staff would help develop carbon offset projects and signing offset purchase agreements from projects under the Kyoto Protocol's Clean Development Mechanism, or CDM.
Under this scheme, investors in wind farms and other clean energy projects in developing nations can earn offsets that can be sold for profit or to meet emissions targets in rich nations.
Tait said while Gazprom was a latecomer to the market, he saw good potential in building a large portfolio of CDM projects to meet demand from customers in Europe and Japan, which need offsets to meet targets under Kyoto or Europe's emissions trading scheme. Japan is also discussing national CO2 trading.
The project portfolio would serve demand from utilities, steel mills and other big polluters well after Kyoto's first commitment period ended in 2012, he said.
This is despite concerns over the future of the CDM given the failure of last December's Copenhagen climate talks to clinch a tougher climate pact to succeed Kyoto from 2013.
"Our gas and power portfolio is massive so to trade around that we would definitely need more (projects)," Tait said, adding carbon trading had a future. "There will be a carbon market whatever it is."
Last year, Gazprom signed up about 25 projects and a further 11 so far this year, Tait said. He expected that figure to grow at between 2 and 3 per month this year, each yielding in the range of 150,000 and 200,000 offsets annually.
