Posted on 10/13/2004 5:31:30 PM PDT by Destro
Canada, Russia sign gas deal
Paul Martin calls plans to bring liquefied natural gas to North America 'huge.'
CP 2004-10-13 03:13:05
MOSCOW -- Plans for a major deal to bring liquefied natural gas to North America from Russia were announced yesterday as Prime Minister Paul Martin met with top business leaders here. "It's huge," Martin said of the proposal, put forward by Petro-Canada, the former Canadian Crown energy corporation, and Russia's biggest gas producer.
Petro-Canada president and chief executive Ron Brenneman outlined a memorandum of understanding that would see the gas shipped to North American markets by 2009.
"North American gas supplies are declining," he said. "They've peaked and more or less flattened out."
Brenneman said the project's potential worth is still being studied, but more than $2 billion Cdn would be spent on plants in Canada and Russia.
The proposed project would see gas shipper TransCanada Corp. and Petro-Canada share the cost of building a $660-million processing plant in Gros Cacouna, Que., near Riviere-du-Loup. That project, announced several weeks ago, faces environmental and regulatory hurdles before it can go ahead.
In Russia, Petro-Canada would partner with Russian giant Gazprom to develop a liquefaction plant near St. Petersburg.
The gas would be sent to Quebec to be stored and re-gasified to ultimately produce an estimated 500 million cubic feet a day of natural gas. It would likely be used to generate power and heat homes in Quebec, Eastern Ontario, New York and New England.
Martin is in Moscow before heading to France and Hungary this week to promote Canadian investment opportunities. He has raised concerns about some high-profile problems that have hampered projects here.
Investors were shocked last August when a Halifax-based company that partly owns the Aerostar luxury hotel in Moscow was suddenly evicted by its co-owner -- a company with suspected ties to Russian mobsters.
The dispute, a closely watched test case for the wisdom of doing business in Russia, is still being investigated. Martin brought up such issues during a three-hour meeting with Russian President Vladimir Putin.
"He recognized that investment would not come unless the rule of law be upheld," Martin said.
It's still early days for the Petro-Canada project, but Brenneman doesn't expect problems.
"The rule of law is improving month by month, year by year and quarter by quarter in Russia," he said.
The Petro-Canada chief executive noted U.S. and European energy companies have already signed deals and made major investments in Russia. "I think that's indicative of the sentiment these days that the climate has changed considerably from where it might have been several years ago.
"We don't particularly see a lot of risk associated with this project," he said. "We're dealing with a first-class organization in Gazprom. It's a very sophisticated organization."
Brenneman said Gazprom has exported gas into western Europe for many years, so expanding into the North American market is just an extension of that marketing strategy for the Russian company.
Success in Russia is all about personal contact, said Nathan Hunt, president of the local Canada Eurasia Russia Business Association chapter.
"Russian ventures cannot be run successfully from an office tower on Bloor Street," he said.
"The most important laws of doing business in Russia are: find a reliable partner, know thy partner and keep thy partner happy."
Most of the high-profile disputes here involve foreign interests neglecting their Russian counterparts as merely a silent partner, Hunt said.
While "90 per cent" of joint ventures bear fruit, high-profile disputes such as Aerostar grab headlines, he added.
For his part, Martin stressed in a meeting with 17 Canadian and Russian corporate leaders that Canadians are ready to invest -- with the right protections.
"We have a great interest in doing business with Russia."
Copyright © The London Free Press 2001,2002,2003
Crap...
I hope Lisa Merkouski can get the Alaska Gas line rammed thru congress before this gets into production.
Great, the Canadians can buy from Russia & we can have more of ours available for domestic use.
This should lower the price in the USA.
I always hated to see our Natural Gas from Louisiana flow thru pipelines going north when we had shortages & high prices within sight of the pipeline.
The incestuous relationship between the Liberal Party and Canadian energy firms makes the Halliburton-Cheney connection look like distant cousins.
Why on earth does Canada need to import anything to do with energy?
Maybe they'll adopt Koyoto & be "Energy Free".
Sorry to inform you Jrushing, but the US imports tons of gas from Canada, we don't export any to them.
Them buying from Russia is mostly for resale to the US, they have all they need for domestic use.
Canada: All the oil and the Arabs too.
She did.
Not to mention with modern reformation, any hydrocarbon can be turned into anything most marketable at any given time with the flick of a switch on a modern NASA like control panel.
Makes sense. They are building an LNG plant near Tijuana to send gas into California. Probably the Quebec plant is going to sell gas into New York.
If Clinton and a few of his cronies were on the board maybe we could get an LNG plant permitted in the US.
Funny, I don't remember any big Greenpeace riots to stop LNG from shipping out of Siberia. I don't remember any Euro NGOs suing to stop hydrocarbons development in Russia. It is only in the Western Hemisphere that Petroleum Derivatives are an existential threat.
Exactly, Canada does produce more than we consume and export the rest. Canada doesnt need US gas and even if we did, is the US in any position to export it at a low enough price that we would pay... no.
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