Norsk Hydro asks Gazprom to swap shares in gas projects

MOSCOW, July 1 (RIA Novosti) - Norwegian energy giant Norsk Hydro proposed swapping a share in its Ormen Lange gas field in the North Sea - with subsequent access to the U.K. retail market - for 15% in the Russian gas monopoly Gazprom's North European Gas Pipeline project, Bengt Lie Hansen, Norsk Hydro manager for Ormen Lange, told the Russian business daily Kommersant.

Hydro began building the 1,200-km (750-mile) pipeline from its North Sea field to the British Isles this March, targeting a capacity of 24 billion cubic meters per year. The pipeline runs at half-a-mile depth, which Hydro said gave it an opportunity to do similar mapping and pipe-laying in the Baltic Sea for the North European Pipeline as it did in the North Sea.

Through its project, Hydro plans to supply up to 10 billion cubic meters of gas to the United Kingdom by 2007 (the company says the amount is likely to grow to 20 billion cubic meters by 2010) and could offer Gazprom an as-of-yet undisclosed share in the market.

Gazprom Chairman's Press Secretary Sergei Kupriyanov said Wednesday that the Russian gas giant was interested in Hydro's proposals, but that the company would take its time in looking them over.

"We are continuing the analysis and talks with all potential partners including Total, ÂÐ, E.ON Ruhrgaz, Gasunie, Shell, and Centrica. One clear deal is with BASF: a joint venture will get 49% in the North European Pipeline. This share, however, might be subject to revision in favor of other partners. We expect to have North European Pipeline agreements signed in September," he said.

The 1,189-km (740-mile) North European Pipeline is expected to pump 55 billion cubic meters of gas - first from Yuzhno-Russkoye field, then from the Arctic gas haven of Yamal and the huge Shtokmanovskoye field - per year from the Russian town of Vyborg in the northwest Leningrad Region through the Baltic Sea to the German coast.

Hydro has 18% in Ormen Lange whose prospects include 10 billion cubic meters of gas in 2007 and up to 22 billion cubic meters by 2009.

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