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Gazprom May Miss Its Gas-Production Target This Year on European Economy

OAO Gazprom may miss its gas production target this year after demand in southern Europe fell sharply because of the region’s economic situation, said Chief Executive Officer Alexei Miller.

“All that we are hearing about the crisis in the euro zone, about the crisis of the state debts in the euro zone, we have seen today in the real economy,” Miller said today at an energy roundtable during the St. Petersburg International Economic Forum. “This is a fact.”

Gazprom, which supplies about a quarter of Europe’s gas, said the recovery that it had been seeing from the global economic crisis since the first half of last year stalled. Cold winter weather boosted consumption in Russia and Europe in the first four months.

While consumption in southern and southeastern Europe has fallen since early May, gas demand in northern Europe and Germany, in particular, has seen a “significant increase,” Miller said. The trend in the European Union has split for the first time “in a long time,” Miller said.

Earlier this month, Gazprom stepped back from a production target of 529 billion cubic meters of gas for this year, given by Miller in April.

The Russian gas export monopoly plans to produce 519.3 billion cubic meters of gas this year, Vsevolod Cherepanov, head of the gas, condensate and oil production department, said on June 9. Gazprom’s output slumped to 462 billion cubic meters last year.

The company aims to produce 528.6 billion cubic meters of gas next year, Cherepanov said.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

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