Interview
Gazprom
INTERVIEW
Going Global: Frederic Barnaud,
President and MD of Gazprom
Global LNG
Gazprom underlined its global LNG ambitions this autumn by forming a new LNG company, Gazprom
Global LNG. The company is a subsidiary of UK-based Gazprom Marketing & Trading (GM&T) – and
earlier this year Frederic Barnaud was appointed as the President and MD of Gazprom Global LNG
(GGLNG). In an exclusive interview with LNG Business Review, Barnaud outlined his plans and the
challenges facing Gazprom’s LNG trading arm as well as the broader LNG sector.
In 2007 Gazprom declared that its strategic goal was to “establish itself as a leader among global energy
companies by entering new markets”. The company’s drive to expand its activities outside Europe
and become a truly global player has rapidly increased. Over the past six months alone the Russian
company has moved to expand its presence in Iran and Nigeria with energy cooperation deals; signed an
exploration deal with Bolivia and Venezuela, and has offered to buy any spare Libyan gas output. Many
observers have questioned the commercial rationale behind many of these deals, claiming that politics,
rather than industrial logic was the main factor.
It is easy to forget, however, that the company only entered the global LNG market three years ago
when GM&T purchased and delivered a cargo of Egyptian LNG to the Cove Point terminal in Maryland.
Between 2005 and June 2008, the company shipped 12 LNG cargoes to the US, UK, Mexico, Japan, India
and South Korea. And since June 2008, it has traded a further 11 cargoes including the agreement in
August to buy 500,000 tonnes from Adgas which will be delivered to Japan and Korea by March 2009.
“We are not yet a big player in the LNG market, or at least up until very recently we have not been,”
Barnaud said. “My intention is to really establish Gazprom Global LNG as a trader of LNG and win
business on a cargo-by-cargo basis. I want us to be competitive in our own right and not rely on third
parties to help provide us with LNG. It is simple to say, it’s a little more complicated to put into action.”
One of the main reasons for reorganising the business and establishing Gazprom Global LNG is to
maximise Gazprom’s participation in LNG downstream markets, prior to the start-up of the Sakhalin and
Shtokman LNG projects, but for Barnaud the first step in developing an effective LNG trading business
will be to establish logistical and operational capabilities.
“We are currently reorganising our internal processes and the operational relationship with terminal
operators in order to be able to take a position on short-term regas, for example Third Party Access (TPA)
and short-term capacity rights. With regard to shipping, we are not taking any speculative positions right
now, but we are chartering vessels on a requirement basis. And we are revamping the entire process in
order to have the capability to move fast in this market.”
Prior to joining GM&T in June, Barnaud had established Total’s LNG trading team, which traded its first
cargo (from Nigeria to Lake Charles) in December 2000. And having led that team for eight years, he
understands the importance of instilling a distinctive LNG culture across the group.
“One of the ideas around setting up Gazprom Global LNG was a way to federate the LNG expertise and
create an LNG identity across the group over the long term.”
“Obviously there is an industry constraint and there are constraints for Gazprom with LNG, but it is an
expertise that we are trying to develop. We cannot hire everybody from the market. It is not the right
solution and that is why we have to develop the Russian experience.”
LNG Business Review - OCTOBER 2008 - WWW.LNGBUSINESSREVIEW.COM 8
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