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Putin invites Shell to join Sakhalin 3, 4 projects

REUTERS

Sat Jun 27, 2009 7:20am EDT

MOSCOW, June 27 (Reuters) – Russian Prime Minister Vladimir Putin has invited Royal Dutch Shell (RDSa.L) to participate in Sakhalin-3 and Sakhalin-4 natural gas projects at a meeting with Chief Executive Jeroen van der Veer on Saturday.

“We are prepared to pursue cooperation further with your company having in mind Sakhalin-3 and Sakhalin-4,” Putin said. “These require offshore production in difficult deep sea areas where your experience will be very valuable.”

In February, Shell helped launch the $22 billion Sakhalin-2 liquefied natural gas project, led by Gazprom, on the Pacific island of Sakhalin. Gazprom earlier said companies with which it had worked on Sakhalin-2 would take preference for Sakhalin-3.

“It is an ideal time to forecast those projects, and we are ready to work quickly here,” van der Veer told Putin.

“We expect construction prices are now lower and it is a good signal. It is a good signal that investments start to flow again, a good signal for Russia and, of course, a good signal for Shell,” he said.

Russia’s first LNG plant, Sakhalin-2, became symbolic of the Kremlin’s drive to reassert control over its natural resources after Shell ceded control of the project to Gazprom under government pressure to lower the budget and reduce its holding.

(Reporting by Simon Shuster, writing by Gleb Bryanski)

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REUTERS ARTICLE

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