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Gazprom eyeing new partnership with Shell

April 10, 2009

MOSCOW (AFP) — Russian gas giant Gazprom on Friday named Anglo-Dutch oil major Royal Dutch Shell as a top “potential partner” in its new upstream Sakhalin-3 project in Russia’s Far East, a top company executive said.

“As soon as we get the license (for Sakhalin-3), we will hold talks with several potential partners, including Shell,” Stanislav Tsigankov, Gazprom’s head of external economic relations, was quoted by news agency Ria-Novosti as saying.

“I think Shell has very good chances” to win the tender, Tsigankov added. “Our work with them is fully positive.”

The two companies signed several agreements on Wednesday notably for the purchase of liquefied natural gas (LNG) from the Sakhalin-2 field over the next 20 years.

Shell chief executive Jeroen Van der Veer hailed that deal as “another important milestone” in the companies’ partnership.

Cooperation between Gazprom and Shell soured at the end of 2006, when Russian state pressure forced the sale of Shell’s controlling stake in the lucrative Sakhalin field.

Gazprom at the time acquired a 51 percent share in Sakhalin Energy for 7.5 billion dollars after Russian authorities accused the Shell-led project of environmental violation on the island in Russia’s Far East.

The Gazprom takeover was widely seen as a Kremlin-orchestrated move to regain control over the exploitation of the country’s natural energy resources.

Sakhalin Island, on Russia’s pacific border near Japan, sits atop a massive 45 million barrels in oil and gas reserves, according to estimates.

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