Gazprom mulls shipping, Asia trade expansions

General view of the main Gazprom building in Moscow January 16, 2009.

SINGAPORE (Reuters) - Russia's Gazprom (GAZP.MM) plans to set up a shipping unit in Singapore and sees opportunities in expanding the trade of other energy products in the Asia-Pacific region.

The gas giant's move into Asia comes as the Russian government urged companies to re-route exports from low-growth Europe to other, faster-expanding markets.

"Certainly there's more potential (in Asia) than we thought," Arthur Tait, president and managing director for Gazprom Marketing and Trading in Singapore, said at the Reuters Global Energy Summit.

"We came with the idea of a couple of (LNG) cargoes a month. I certainly expect it to grow outwards by commodities and by geography."

Gazprom launched its first commercial office in the Asia-Pacific region two months ago to start spot sales of liquefied natural gas (LNG), carry out crude oil hedges and carbon trading.

The Russian gas giant is among 35 companies which joined the Global Trader Programme in Singapore where energy trade exceeded $362 billion last year, IE Singapore said on Friday.

Gazprom sells on average two spot LNG cargoes a month from its Sakahlin Energy joint-venture and has two LNG carriers on long-term charter.

"It won't be a big fleet but it'll grow from two," he said. "Once you've got a shipping operation then it's easy to expand that to crude and condensates."

READY CRUDE SUPPLIES

Gazprom Neft (SIBN.MM), Russia's fifth-biggest oil producer, markets Russian Urals and Siberian Light Crude Oil, in addition to the new ESPO Blend from the Far East port of Kozmino.

In 2008, Gazprom Neft Trading GmbH exported 16 million tonnes of crude and 9.4 million tonnes of oil products, the company said on its website.

Most of the buyers of the medium-heavy sweet ESPO crude are trading companies as well as refiners in South Korea, China and Japan.

However, for the time being, Gazprom is focused on setting up its trading capability in Singapore, Tait said.

The company has hired two senior traders who will start in July and September to trade liquefied petroleum gas (LPG) and crude oil, Tait said.

It planned to have around 30 to 34 staff across all the products -- LNG trading, carbon, oil trading, FX trading and back-office functions.

Gazprom is also looking at hedging its LNG trade off the Japan Crude Cocktail (JCC), which the company cannot trade in London. It also hedges its LNG against London Brent crude, Tait said.

The Japan Crude Cocktail (JCC) price, or the average price for customs-cleared crude oil imports, is used as the benchmark for LNG prices for Japanese buyers.

Asked if Gazprom was looking to sign additional long-term LNG supply contracts, Tait said: "We've actually had a couple of enquiries for term deals, but I think we're still mindful that prices have got time to go up a little bit."

(Editing by Ramthan Hussain)