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RosBusinessConsulting: Gas supplies for RAO UES within Sakhalin-2 under discussion

RBC, 04.08.2006, Moscow 15:07:59.The Russian Industry and Energy Ministry will hold consultations with the Federal Agency for Energy (Rosenergo), the Sakhalin regional administration, and other parties involved to consider the possibility of supplying gas for RAO UES’ internal use within the Sakhalin-2 project. A proposal to hold such consultations, made by RAO UES President Anatoly Chubais and Sakhalin region Governor Ivan Malakhov, was backed by the Industry and Energy Ministry, its press service reported.

A source within the Sakhalin Energy consortium (the project operator) clarified for RBC that a technical possibility for gas offtake was provided for in the project terms during the construction of the gas pipeline.

Oil and gas market experts believe that fuel can be supplied to the energy holding within the terms of the project only if Sakhalin-2 and Sakhalin-1 shareholders reach an agreement to transport gas from Sakhalin-1 fields using the gas pipeline owned by the Sakhalin Energy consortium (its construction is almost complete). However, the two projects’ shareholders are facing hardships in their talks on this matter. It is possible that Sakhalin-1 shareholders will decide to liquefy natural gas at a Sakhalin Energy-owned plant instead.

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