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Gazprom and Shell CEO’s sign JV agreements

By New Europe Online/KG

Royal Dutch Shell and Russian gas monopoly Gazprom have signed two agreements on the Baltic liquefied natural gas (LNG) project.

Gazprom CEO Alexey Miller and Shell CEO Ben van Beurden signed the agreements at the St. Petersburg International Economic Forum 2017 on June 3.

The first agreement to sign a joint venture, which will secure financing for and carry out the design, construction and operation of the LNG plant in the Leningrad Region. Based on that concept, Gazprom and Shell will take further steps in the implementation of the Baltic LNG project.

The Shell and Gazprom CEOs also signed the Joint Study Framework Agreement on the Baltic LNG project. The signing of this document will allow the companies to start developing preliminary project documentation as soon as possible.

The Baltic LNG project envisages the construction of the LNG plant with an annual capacity of 10 million tonnes in the port of Ust-Luga, Leningrad Region.

Gazprom and Shell are jointly engaged in the Sakhalin II project, which includes Russia’s only active LNG plant. The Sakhalin II operator is Sakhalin Energy Investment Company Ltd. (Gazprom – 50% plus one share, Shell – 27.5% minus one share, Mitsui – 12.5%, and Mitsubishi – 10%).

In 2015, Gazprom and Shell signed the Memorandum to construct the third production train of the LNG plant, as well as the Agreement of Strategic Cooperation providing for the expansion of the companies’ joint project portfolio, including a potential asset swap. In 2016, the LNG plant produced upward of 10.9 million tonnes of LNG, exceeding the design capacity by over 1.3 million tonnes.

In June 2016, Gazprom and Shell signed the Memorandum of Understanding on the Baltic LNG project. The document reflects the parties’ intention to explore the prospects for cooperation within the project.

SOURCE

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