A Review of the Nigerian Energy Industry

Baltic LNG stake ‘on radar’ for pair

LNG28 November 2013, News Wires – France’s Total is seeking to acquire a stake in a future Baltic liquefied natural gas plant being planned by Russian gas giant Gazprom, which has also invited Anglo-Dutch supermajor Shell to join the project, according to a report.

Earlier this year, Gazprom revived plans to build a plant to produce LNG on the shore of the Baltic Sea after it shelved the Shtokman project in the Barents Sea – in which Total is a partner – due to technical challenges and high development costs, as well as a market shift that made it uneconomic.

Gazprom plans to launch the first stage of its Baltic LNG plant, which will have annual production capacity of up to 10 million tonnes, at the end of 2018.

Total now wants to swap its stake in Shtokman for participation in other Gazprom projects, including Baltic LNG, Russian newspaper Vedomosti reported, citing sources close to the two companies.

Gazprom has also invited Shell – its partner in Russia’s only LNG plant – to join the project, the paper said, without attributing the information to any sources.

The state-run gas producer plans to ship LNG from the plant to Europe, India and South America as the Kremlin is keen to double Russia’s LNG global market share by 2020 from around 4.5% at present.

However, it faces increasing competition from domestic rivals Novatek and state-owned Rosneft as Russia is set to open up LNG exports for other players from early next year after a recent parliamentary ruling, though Gazprom will retain its monopoly on pipeline exports to overseas markets.

Total is also a partner with Novatek in the West Siberian Yamal LNG project, which is due to start shipments in 2018.

Russia’s only operational LNG plant, located on Sakhalin Island in the far east of the country, is operated by Gazprom with partners Shell and Japan’s Mitsui, which are keen to expand its capacity from 10 million to 15 million tonnes per annum but have so far failed to persuade the operator.

Gazprom, Total and Shell in Moscow declined to comment.

– Upstream

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