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Gazprom Signs Asset – Swap Deal With Shell

THE NEW YORK TIMES: Gazprom Signs Asset – Swap Deal With Shell

“Gazprom will get a 25 percent-plus one share stake in the Shell-led Sakhalin-2 natural gas project off Russia’s Far Eastern coast. Shell, in turn, gets access to the world’s fifth-largest gas deposit, located in far northern Russia.”

Posted Friday 8 July 2005

By THE ASSOCIATED PRESS

MOSCOW (AP) — Russia’s natural gas giant, Gazprom, signed a memorandum with the Royal Dutch/Shell Group of Cos. on Thursday in a landmark asset-swap deal that gives the state-run gas monopoly a key foothold in a major liquefied natural gas project.

Gazprom will get a 25 percent-plus one share stake in the Shell-led Sakhalin-2 natural gas project off Russia’s Far Eastern coast. Shell, in turn, gets access to the world’s fifth-largest gas deposit, located in far northern Russia.

The Zapolyarnoye-Neocomian field has an estimated 400 billion cubic meters (676 billion cubic yards) of gas and 400 million barrels of gas condensate. Sakhalin-2 — which includes Japanese companies Mitsui and Mitsubishi — has over 500 billion cubic meters (650 billion cubic yards) of gas and a billion barrels of oil.

Gazprom Chief Executive Alexei Miller said the deal opens the way for Gazprom to become ”a large shareholder of a fast-growing project for hydrocarbons development, LNG production and sale to strategic markets” such as the United States and the Asia Pacific rim.

Gazprom is the world’s largest gas producer.

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