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Russia Sakhalin-2 project gets extra $1.4 bln

Reuters India

Thu Oct 1, 2009 2:10pm IST

MOSCOW, Oct 1 (Reuters) – Sakhalin Energy, a group led by Russia’s Gazprom (GAZP.MM: Quote, Profile, Research) and involving Royal Dutch Shell (RDSa.L: Quote, Profile, Research), has secured $1.4 billion of new funding for its Sakhalin-2 liquefied natural gas project, a news agency reported.

The money comes on top of $5.3 billion provided by the Japan Bank for International Cooperation and a consortium of international commercial banks, Interfax quoted Ian Craig, the head of the project, as saying on Thursday.

The new funds will be paid in soon, Craig told the agency.

The LNG project, sited on the Russian Pacific island of the same name, is one of the world’s largest. The Sakhalin consortium also includes Japan’s Mitsui (8031.T: Quote, Profile, Research) and Mitsubishi (8058.T: Quote, Profile, Research).

Gazprom bought control of the $22 billion venture in 2007 after a lengthy dispute, forcing Royal Dutch Shell — the project’s former leader — and its partners to reduce their holdings.

Sakhalin Energy plans to produce 9.6 million tonnes of LNG per year by 2011.

According to the head of Gazprom’s export unit Alexander Medvedev, the energy giant aims to produce up to 17 million tonnes of LNG at Sakhalin-2 and its Shtokman project in the Arctic by 2020, Interfax reported.

Gazprom has also pencilled in the Yamal Peninsula as a region for LNG production under a long-term development programme that aims to increase Russia’s share of the global market to more than 20 percent from just a few percent currently.

(Reporting by Vladimir Soldatkin; editing by John Stonestreet)

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