Gazprom integrates, plans modernization

MOSCOW, June 17 (UPI) -- Russian energy giant Gazprom inaugurated in Moscow its Gazprom Energy House intended to integrate the oil and gas sector.

The Gazprom Energy House will host several subsidiaries of the gas monopoly as part of a strategy to unify various energy sectors in Russia, said Alexei Miller, chief executive at Gazprom.

"Gazprom consecutively steps up its strategy aimed at establishing itself as a leader among global energy companies," he said. "We are convinced that this cannot be achieved without vertical integration and interdisciplinary approach that will unite for instance, oil and gas, gas and power generation sector."

Gazprom said the energy sector is in dire need of modernization, with efforts going to the development of new facilities for power generation and the reconstruction of existing infrastructure.

Investments totaling $8 billion over the next four years will go toward modernization of electrical power stations, which Gazprom described as an "unprecedented rate."

The inauguration of Gazprom House comes as the company announced it would cut its capital spending in 2009 from $20.3 billion to $16 billion in 2009.

Officials at the energy giant also predicted an 8 percent reduction in gas production for 2010.

Low output and slumping production at various fields operated by the Russian energy monopoly are in response to declining demand in Europe and Russia.