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Shell weighs LNG options with Gazprom

Published: Feb. 8, 2011 at 7:31 AM

MOSCOW, Feb. 8 (UPI) — Royal Dutch Shell could hand some of its assets in Asia over to Russia’s Gazprom in an effort to expand liquefied natural gas options, sources said.

Shell executives are said to be eager to add a third LNG unit at the Sakhalin-2 facility north of Japan. The move would increase output at the plant, Russia’s only such facility, by as much as 50 percent.

The Sakhalin-2 facility started operations in 2009. Shell, which holds a minority stake in the project, said the plant meets 5 percent of the world’s production of LNG when operating at full capacity.

Sources familiar with the possible deal between the two companies said the Sakhalin-2 move follows agreements reached in November to increase bilateral cooperation, reports Bloomberg News.

Both sides, Bloomberg adds, are pondering deadlines for the negotiations but sources revealed little else. Talks in November, sources added, covered oil and gas developments in Siberia as well as overseas work and possible exploration of Russia’s arctic regions.

Russia’s Rosneft and BP reached a deal last month to explore the Russian arctic, though the measure is stalled in a London court.

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