The broadening of U.S. sanctions will not affect Gazprom, the Russian gas giant’s CEO Alexey Miller told reporters on the sidelines of the Eastern Economic Forum on September 17, 2016.

The inclusion of Gazprom subsidiaries in the list of U.S. sanctions “won’t have an effect” on the group’s activity Mr. Miller said. The inclusion of a number of Gazprom subsidiaries on the U.S. sectoral sanctions list does not impose any new restrictions on them, Gazprom reported.

“As happened previously, the sanctions only affect the implementation of projects associated with oil production at deep-water sections on the Arctic shelf and shale deposits. Previous sanctions applied to them, as companies in which Gazprom has a stake of 50 percent or higher. Now those companies are listed outright,” Gazprom said.

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), which administers sanctions, announced on September 1, 2016 that more individuals and organizations have been included in the Ukrainian sanctions. Numerous Gazprom production and transportation subsidiaries were added to the sectoral sanctions list. The new sanctions announced by OFAC are sectoral sanctions, and are significantly less severe than the restrictive measures imposed on those on the Specially Designated Nationals List. The sectoral sanctions deprive an organization of the ability to obtain long-term financing, although they may conduct other transactions.

Gazprom thinks gas exports could stay high in 2017, Mr. Miller told reporters. Asked about forecast gas exports in 2017, he said, “Several factors point towards increasing gas exports to Europe. One is the drop in production within the European Union, in particular the Netherlands, and the drop in deliveries by traditional suppliers.”

“There is still competition between centers of consumption in Europe. The consumption of LNG is seeing a decline in Europe, and the share of pipeline gas is increasing. Apart from the factors that worked structurally in favor of increasing the volume, there is also the factor of a general increase in gas demand. And there is the natural index factor. The natural index for E.U. countries in the first half of the year was conducive to higher gas supplies. All this generally makes for a 10-percent growth in exports for the eight months of 2016. On the whole, such tendencies are sufficiently objective,” Miller said.

The third auction that Gazprom Export LLC held for the sale of natural gas for European countries from August 31 to September 2 resulted in contracts with 11 companies for a total of about two billion cubic meters (bcm) of gas, the company said in a statement. The gas will be supplied during the 2016/2017 winter season.

As at the initial auction that was held in September 2015, the gas at this year’s auction was offered for delivery at Greifswald, Gaspool, and Olbernhau. In addition, bidders in the auction had the opportunity to take delivery of the gas at Baumgarten and Arnoldstein.

Gazprom is ready to fulfill a government order to cut operating costs by 10 percent, Mr. Miller told journalists. “Of course, we have been working on that for a long time,” he said. Gazprom said that its board of directors would consider updated plans to cut operating costs by 10 percent at a meeting in the coming weeks.

Elsewhere, Gazprom is finalizing the project documents for the Sakhalin III project, deputy CEO Vitaly Markelov said at the Eastern Economic Forum. “As of today, the project documents are being drafted. We will finish the draft this year,” Mr. Markelov said.

“I believe that the development of liquefied gas at Sakhalin will provide a fresh impetus to Sakhalin’s development itself and increase gas supplies to Japan, Korea, and China,” he said.

“We plan to make the investment decisions in 2017,” Mr. Markelov said.