Posted on 04/09/2009 5:57:25 AM PDT by thackney
Shell has secured new supplies of Russian gas from Gazprom to sell in Europe, Shell said in a statement Wednesday.
The new supply was agreed in a deal between Gazprom chairman Alexei Miller and Shell CEO Jeroen Van der Veer in Moscow, covering both LNG and pipeline gas.
"Through this 20-year agreement Shell will be able to strengthen the diversification and flexibility of its supply portfolio and its marketing position in the European gas market," Shell said.
The volumes delivered to Europe will be equivalent to those covered in an LNG deal under which Shell Eastern Trading and Gazprom Global LNG will buy LNG from the Sakhalin Energy Investment Company.
Deliveries to Gazprom and Shell from Sakhalin, offshore east Russia, begin in 2009 and will last until 2028, totaling 1 million mt/year each to Gazprom and Shell at plateau. 1 mt/year of LNG is equal to about 1.5 billion cubic meters/year of gas.
Sakhalin Energy Investment Company is part owned by Shell and Gazprom.
Russian company Gazprom has 50% plus one share, Shell 27.5%, Mitsui 12.5% and Mitsubishi 10%.
Gazprom affiliates, under long-term assignment from Shell, will also take capacity in Sempra's Energia Costa Azul LNG import terminal in Baja California, Mexico, and pipeline capacity to enable gas to be transported to southern California.
Miller and Van der Veer also discussed opportunities for further expansion of bilateral cooperation in LNG projects in Russia.
That is, until the Russkies decide that they want to change the terms of such deals.
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