Action stations: work is still being carried out on Sakhalin 1
Moscow turns screws on Sakhalin 1
Moscow wants ExxonMobil to send gas from Sakhalin 1 to Russia rather than Asian markets, the energy ministry said today, signalling a new round of pressure on the country's last big foreign-led energy project.
"The state representatives informed the investors' consortium about Russia's priority to supply gas from Sakhalin 1 to the domestic market," the ministry said in a statement following a meeting of Sakhalin 1's supervisory committee.
In 2004, ExxonMobil signed a preliminary agreement to supply 8 billion cubic metres of Sakhalin 1 gas to China National Petroleum Corporation, but it has also held talks with Japan and India, which want to import Sakhalin's gas as liquefied natural gas.
Russia's Gazprom, which has monopoly right to export Russian gas, asked the government in June to block the plan saying it would create shortage on the Russian domestic market, a Reuters report said.
ExxonMobil's Sakhalin 1 development is a rare production sharing project between foreign investors and the Russia state, which are not governed by Gazprom's export monopoly, which prompted the two companies to start talks over the future gas flows.
Gazprom boosted its positions on Sakhalin last year when it obtained control over the nearby Sakhalin 2 project, forcing the previous leader Shell to cede control following months of state pressure.
Analysts have speculated Gazprom may want to force ExxonMobil to sell gas at knock-down prices to bring it to the LNG plant and liquefy for exports to Asia, Reuters said. Meanwhile, Gazprom has said it is in talks with ExxonMobil about buying all of Sakhalin 1's gas.
Sakhalin 1 also involves Russian state-controlled Rosneft, India's Oil & Natural Gas Corporation and Japan's Sodeco.