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The Scotsman: Shell sees Sakhalin-2 deal with Gazprom this week

MOSCOW (Reuters) – Royal Dutch Shell could make a deal with Gazprom on the $22 billion Sakhalin-2 project by the end of this week if progress in talks continues, a spokesman said on Sunday.

“If progress continues to be made, we would expect talks to conclude by the end of this week,” said Shell spokesman Alf D’Souza. He described the talks as constructive.

Industry sources told Reuters last week that Shell has offered to cede control of the Sakhalin-2 project, the world’s largest liquefied natural gas project. It is also Russia’s biggest single foreign investment.

Shell, as operator of the project, has a 55-percent stake, while Japanese partners Mitsui & Co <8031.T>. and Mitsubishi <8058.T> have stakes of 25 percent and 20 percent.

Shell CEO Jeroen van der Veer met Gazprom CEO Alexei Miller and Russian Energy Minister Viktor Khristenko last week.

Getting a major stake in Sakhalin-2 would be a victory for Gazprom’s Miller and the Kremlin as senior officials wrestle control over major oil and gas projects in Russia.

(c) Reuters 2006. All rights reserved.

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