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UPI Energy Watch: Gazprom unable to join Sakhalin-2 by deadline

UPI Energy Correspondent

Russian natural gas giant Gazprom is short of time to join the oil and gas project Sakhalin-2 by the end of March, ITAR-TASS reported Friday.

Gazprom had hoped to complete the deal by March 31.

“Sakhalin-2 is a very large project, and a great amount of details that need to be agreed upon is present here, and this is very difficult technically,” Maxim Shub, Shell spokesman, told ITAR-TASS.

Shub said that intense talks on the completion of the deal were carried on, but a snag was a huge amount of documents to be coordinated.

“We hope to complete these talks this year,” Shub said, adding that “large groups of experts on both sides, including at the level of the leadership” participate in the talks.

Gazprom, Shell, Mitsui and Mitsubishi signed on Dec. 21, 2006, a protocol on the Russian company’s joining Sakhalin Energy in the capacity of a leading shareholder.

Under conditions of the protocol, Gazprom is to purchase 50 percent of shares plus one share in Sakhalin Energy.

In order to complete the deal, each of Sakhalin Energy’s shareholders will reduce its stake by 50 percent with a proportional distribution of payments.

After completion of the transfer, Shell will have 27.5 percent of shares, Mitsui 12.5 percent and Mitsubishi 10 percent.

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