MOSCOW, September 13 (RIA Novosti) - Gazprom and BP have signed a contract to supply liquefied natural gas to the Atlantic region, the Russian energy giant said Wednesday.
BP, one the of the world's biggest independent oil and gas producers, will supply LNG provided by Gazprom Marketing & Trading Ltd, Gazprom's subsidiary operating in the United Kingdom, in 2006 and early 2007.
"The contract is a further step by Gazprom Marketing & Trading toward expanding its LNG contract portfolio," Alexander Medvedev, deputy board chairman of Gazprom [RTS: GAZP], is quoted as saying. "An alliance with BP will advance the company's strategy on the LNG market."
The Russian subsidiary will determine delivery points depending on market demand, Gazprom said in a news release.
The first batch of 135,000 cubic meters of LNG was loaded Wednesday onto a BP tanker in Point Fortin port in Trinidad and Tobago for delivery to the United States terminal in Cove Point, Maryland.
In August 2005, Gazprom Marketing signed deals with Shell Western BV and the UK-based energy producer and distributor BG Group on LNG supplies to the U.S. market. The first tanker under the contract arrived in Cove Point in September the same year.
In November 2005, the company signed similar contracts with Gaz de France, MED LNG & GAS, a joint venture between Gaz de France and Algeria's state-owned Sonatrach, and Shell. A consignment of LNG was sold to Shell Western LNG and supplied to Cove Point for re-gasification in early December 2005.
The Gazprom subsidiary sold its first consignment of about 140,000 cubic meters of liquefied gas (about 85 million cubic meters of natural gas) it had acquired from Gaz de France to BP in April 2006, delivering it to the Isle of Grain terminal in the UK.
Liquefied natural gas is becoming increasingly important for Gazprom, and the share of LNG in the energy giant's operations is increasing as production at natural gas deposits stagnates.
In Russia, Gazprom plans to build an LNG plant on the Baltic Sea coast near St. Petersburg to produce 5 million tons of LNG a year by 2009, and it is looking for a partner with relevant expertise. Italy's Eni and Algeria's Sonatrach are among Gazprom's possible choices.
Gazprom also controls a project to develop the giant Shtokman field, which holds an estimated 3.2 trillion cubic meters of natural gas and 31 million metric tons of gas condensate in the Barents Sea, and to build an LNG plant there. The concern has yet to finalize its choice of partners.
The company is also reportedly looking to gain at least 25% of shares in the Sakhalin II project in Russia's Far East, which is run by a consortium of foreign companies, in return for a stake in the massive West Siberian Zapolyarnoye-Neocomian project.
The construction of what will be one of the world's largest LNG plants, with a capacity of about 10 million tons of LNG a year, is being completed on Sakhalin.