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Bloomberg: Gazprom to Finish Sakhalin-2 Share Purchase in March (Update1)

By Shigeru Sato and Yuji Okada

Feb. 28 (Bloomberg) — OAO Gazprom plans to complete the acquisition of shares in Royal Dutch Shell Plc’s Sakhalin-2 oil and gas project by March 31, giving the Russian company control over the country’s first liquefied natural gas project.

“We’re targeting the end of March,” Igor Bakhtin, deputy head of Gazprom’s eastern projects department, told Bloomberg News in Tokyo when asked for the company’s timetable for the share transaction.

Gazprom agreed in December to buy 50 percent plus one share of the Sakhalin-2 project for $7.45 billion. Shell, Mitsui & Co. and Mitsubishi Corp. will each sell half of their stakes in the project to the Russian company. Shell and the two partners have invested $12 billion in the venture, which clinched contracts to export 5 million tons a year of LNG to Japanese buyers.

Sakhalin-2 has committed to sell almost all of its planned LNG output to utilities in Japan, South Korea and North America. The project is expected to produce 9.6 million tons a year of LNG, which is gas cooled to liquid for transport by tanker.

Shell owned 55 percent of Sakhalin-2, Mitsubishi 20 percent and Mitsui 25 percent before the agreement with Gazprom.

To contact the reporters on this story: Shigeru Sato in Tokyo at [email protected] ; Yuji Okada in Tokyo at [email protected] .

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