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St Petersburg Times: TNK-BP Told to Let Gazprom In

Reuters

MOSCOW — TNK-BP must accommodate Gazprom into its giant Kovykta gas project or face new sanctions for licensing noncompliance, an official said Thursday.

TNK-BP is the main shareholder in Rusia Petroleum, which has the license to operate Kovykta. Under the licensing agreement, the firm should produce 9 billion cubic meters of gas next year.

TNK-BP wants to export gas from Kovykta, in Siberia, to China. But its plans have stalled because Gazprom has refused to let the $10 billion project build a pipeline to the border and restricts it to supplying a local market that needs no more than 2.5 bcm.

“This is not an objective reason to change the licensing agreement. … I very much hope that TNK-BP and Gazprom reach an agreement. They have no choice,” said Anatoly Ledovskikh, head of the Natural Resources Ministry’s Subsoil Resource Use Agency. He added that the ministry’s environmental watchdog had started checks at the project and that the agencies were going to discuss compliance with Kovykta’s license as soon as the checks were completed in January.

The environmental watchdog earlier said TNK-BP violated environmental laws when it built a local gas pipeline at Kovykta and requested prosecutors to investigate. They threatened to withdraw the license.

BP CEO John Browne said two years ago that he was hopeful Gazprom would soon join Kovykta to help unlock the project. Gazprom has said the field will not be needed for exports until 2015.

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