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Reuters: Shell eyes gas extraction in Russia south-governor

Thu Mar 13, 2008 5:32pm GMT

MOSCOW, March 13 (Reuters) – Anglo-Dutch oil major Royal Dutch Shell (RDSa.L: Quote, Profile, Research) is eyeing a high-sulphur gas project in Russia’s Astrakhan, the Web site of the southern region’s governor reported on Thursday.

“We have always paid great importance to the Caspian region, where we have been for over a hundred years,” the head of Shell in Russia Chris Finlayson was quoted as saying to the regional governor Alexander Zhilkinym.

The exchange was published on the Astrakhan governor’s Web site www.jilkin.ru.

Finlayson underlined Shell’s interests in the development of sulphur dioxide gas. The company already extracts and processes it in Canada, the United States and Oman.

“A large-scale mining and extraction development would play a larger role in increasing the capacity of the South Stream pipeline,” Finlayson was quoted as saying, adding that the resources in Astrakhan are “staggering even on a world scale.”

While Shell confirmed the meeting had taken place, it did not elaborate on the context of their conversation.

“We meet regularly with representatives of regional authorities and discuss current issues and prospects,” Shell spokesman Maxim Shub said.

The 10 billion euro ($15.59 billion) South Stream pipeline, which will be jointly built by Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) and Italy’s ENI (ENI.MI: Quote, Profile, Research), will take 30 billion cubic metres (bcm) of Russian gas to southern Europe a year.

Shell is the second-largest shareholder in the Sakhalin-2 oil and gas project on Russia’s far eastern island by the same name and has expressed its desire to further expand in Russia, particularly in the resource-rich northern Yamal region.

(Reporting by Moscow bureau, writing by Amie Ferris-Rotman)

© Reuters 2008 All rights reserved.

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