Exxon, Conoco could join Yamal LNG
November 19, 2008 - 0:0
MOSKOW (Reuters) -- Russia’s Gazprom is considering U.S. majors Exxon Mobil and ConocoPhillips for its liquefied natural gas (LNG) projects in Russia’s Arctic Yamal region, its deputy chairman said on Tuesday. Alexander Medvedev also said Conoco could gain access to gas deposits in Yamal in exchange for Russian gas export monopoly Gazprom joining gas projects in Alaska.
“The list (of possible participants) is currently being made, but we do not exclude majors such as Exxon Mobil and Conoco from joining the project,” Medvedev told reporters on the sidelines of a gas conference.In the summer Gazprom said it saw Royal Dutch Shell as one of its potential partners in LNG projects in the gas-rich Arctic Yamal peninsula, where temperatures regularly drop to -40 celsius.
Time frames of potential projects are not yet known.
Medvedev also said Conoco could gain access to the Yuzhno Tambeisky gas deposits in Yamal.
His statements marked a major turning point in agreements between Gazprom and the far northwestern U.S. state, which is divided from Russia by the mostly frozen Bering sea Strait.
Critics say the Alaskan gas pipeline, a project idea which has existed since the 1970s, will be too costly and has already faced severe delays due to revenue disputes.
But Medvedev said that while Alaska can pose technical challenges, it is not dissimilar from Russia.
“Recently, we had a meeting with top managers of Conoco and outlined potential areas of cooperation. One of these areas (involves) the Arctic, both in the United States and Russia... they are very similar.”
Gazprom views Yamal as its key source of future gas output as production is falling at mature deposits in West Siberia. The firm has said new deposits on Yamal and in East Siberia and the Russian Far East will account for half of its output by 2020.
------------------------Gazprom urges Europe to decide on pipelines, LNG as sales climb
OAO Gazprom called on European consumer countries to decide on how they wish to receive natural gas from Russia as the state-run exporter of the fuel increases exports this year by about 4.7 percent, Bloomberg reported.
Exports to Europe will probably reach 161 billion cubic meters in 2008, Deputy Chief Executive Officer Alexander Medvedev said at a gas conference in Moscow on Tuesday. Russia last year shipped 153.7 billion cubic meters to Europe, where it has about a quarter of the market.
Medvedev echoed a call made last week by Russian Prime Minister Vladimir Putin for European customers to choose between deliveries of liquefied natural gas or deliveries by pipeline. Gazprom is considering more LNG plants in addition to the Arctic Shtokman project, he said.
“Building LNG plants is absolutely realistic,” Medvedev, who heads Gazprom’s export operations, told the conference. “Aside from the Shtokman project there are at least two projects for building gas liquefaction plants in western and in eastern Siberia.’
State-run Gazprom, which is planning to build pipelines to Europe via the Baltic and the Black seas, depends on foreign sales for most of its profit because the government caps domestic prices to subsidize companies and households. LNG is natural gas that’s chilled to a liquid to allow transportation by ship.
Russia’s largest gas producer dropped a Baltic LNG project near St. Petersburg in February to concentrate on the Shtokman field, which it says has enough gas to supply the world for a year, and on the Nord Stream pipeline under the Baltic Sea.
----------Nord Stream funding
The Nord Stream venture comprises two parallel links running 1,200 kilometers (750 miles) from Russia to Germany. Funding for the first link should be arranged by July next year and for the second 12 months later, Paul Corcoran, the venture’s financial director, said at the conference.
Gazprom and Italy’s Eni SpA are also developing the South Stream link to carry gas across the Black Sea to Europe via the Balkans. Pipeline exports may reach 219 to 227 billion cubic meters in 2020, Medvedev said.
In June, Medvedev predicted European consumers would increase consumption of Russian gas by 11 percent to 166.8 billion cubic meters this year.