New York – The Russians are coming!

OK, Perspectives knows that's a dated Cold War cliché … we apologize.

But Gazprom is coming! Or, more accurately, it's already here.

Alas, the giant natural gas company, which controls 17 percent of the world's gas reserves, may have a reputation issue to cope with–one stemming from political flaps between Russia and the Ukraine over energy supplies.

Gazprom is already supplying Southern California with natural gas from liquefied natural gas (LNG) that was shipped from the company's Sakhalin 1 LNG facility in Russia to an LNG terminal in Baja, Mexico. The LNG was then piped north of the border to the United States.

And Gazprom sees that as just a start.

The company plans to begin gas marketing and trading activities by October 2009 from its offices in Houston, and the firm also offers carbon trading, said John Hattenberger, Gazprom Marketing and Trading USA Inc.'s president and managing director.

"We have a new kid on the block. And our goal is to be a major partner, a major supplier, a major trader, with you in the marketplace here in North America beginning this fall," Hattenberger told attendees at GasMart 2009 in Chicago.

GasMart is hosted by Intelligence Press Inc., Sterling, Va.

Gazprom hopes to bring as much as 3- to 5-billion cubic feet per day by 2020 and to capitalize on potential carbon cap-and-trade legislation proposed by the Obama administration through its carbon trading services, Hattenberger said. "This is not a start up business," Hattenberger said of the firm's carbon services. Gazprom started carbon trading operations in North America on Jan. 1 and has been trading carbon in Europe for years, he said. On some days, Gazprom accounts for as much of 40 percent of carbon emissions trading credits in Western Europe, he said.

"We can offer very attractive, innovative solutions on the carbon side," Hattenberger said.

But Gazprom might have a bit of a reputation problem to overcome–an issue that surfaced during a question-and-answer period following Hattenberger's bullish presentation on the potential for Russian LNG in the U.S. market.

The moderator, former AMM reporter and Intelligence Press Inc. publisher and founder Ellen Beswick, acknowledged the query was one that usually goes unspoken. But someone in the audience had submitted it … Could the Russian government use gas as political leverage in the United States? (The "as it allegedly did in the Ukraine part" was left unspoken.)

Hattenberger said that is a question no one should feel shy asking about because it is a query Gazprom faces regularly. (Perspectives wondered why everyone seemed to be on egg shells? And why did Gazprom need to reassure them that there was no need to be nervous?)

"Fundamentally, the issue is can a company that has reliably supplied natural gas to 32 countries … have their image tarnished by one or two incidents in the Ukraine? I think the answer is, 'No. I don't think that's a representative sample," Hattenberger said.

He compared the Ukraine to someone who refuses to pay his bills on time.

"In the United States, as in many countries, if you have a gas customer who doesn't pay his bills, you usually have a chat with him about it," he said. "And when the sums get up to a large enough size, you cut off the gas. This is well known. Utilities do it all the time."

In short, cutting off the gas to delinquent customers is the normal course of business, and something any prudent businessperson would do, Hattenberger argued.

"If the amount in arrears hits $1.3 billion, I think you've probably waited long enough. And in the case of the Ukraine, that's what happened," he alleged. "So, Gazprom had no choice but to cut the gas off."

Shortages occurred in Western Europe because the Ukraine continued to take gas out of the pipeline even after it had been cut off, Hattenberger argued. Gazprom pulled its own gas out of storage and "basically fixed the problem the Ukraine has caused," he said.

Gazprom unfairly suffered a "black eye" in the process, but the company continues to enjoy a good reputation in most of the world, including Europe, Hattenberger said.

"Gazprom is seen as a true reliable supplier," he said. "The U.S. press has treated it as a political issue, which I can tell you is a slanted view. That kind of press does not appear in Western Europe."

Gazprom has no intention of "being anything other than a reliable supplier in North America," Hattenberger said.

reprinted with permission from American Metal Market.