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TMCnet: Sakhalin-2 participants to meet with Gazprom on Feb 21

(Interfax News Agency Via Thomson Dialog NewsEdge)MOSCOW. Feb 17 (Interfax) – Participants in the Sakhalin-2 oil and gas project – Anglo-Dutch Royal Dutch Shell and Japan's Mitsui and Mitsubishi – are to meet with Russian gas giant OAO Gazprom on February 21, a source close to preparations for the meeting told Interfax.
The source said that on the same day a meeting is planned between management from Mitsubishi and Gazprom to discuss trade in liquefied natural gas.
Gazprom (RTS: GAZP) and Royal Dutch Shell, which owns a 55% stake in Sakhalin-2, agreed to exchange shares in Sakhalin-2 and theZapolyarnoye-Neocomian project which is being developed by the Russian company. As a result of the deal Gazprom will receive 25% plus one share in Sakhalin-2 and Shell – a 50% stake in the Zapolyarnoye-Neocomian project. However, after Shell announced an almost 100% increase in expenditure on the second stage of the project, Gazprom announced that this would lead to a reduction in the value of the Shell assets in the Sakhalin-2 project.
If it sells 25% plus one share in the project to Gazprom, Shell will retain less than 30%. The Japanese companies own a total of 45%. At the end of January this year they announced that they are discussing the possibility of selling part of their stake to Shell. Mitsubishi CFO Ichiro Mizuno said that the sale is connected with the planned deal between Shell and Gazprom, but he did not give any details.
Shell is not commenting on the possibility of increasing its stake in the project.
Gazprom plans to wind up talks on exchanging the assets by August 2006.
The Sakhalin-2 project involves the development of the Piltun- Astokhsky and Lunskoye fields off the Sakhalin coast. Total reserves of oil and gas at these deposits amount to 150 million tonnes and 500 billion cubic meters respectively. rd

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