Future LNG port: a Russian fisherman sits inside a plastic tent to protect himself against the cold in the Baltic Sea near St Petersburg. Photo: Alexander Demianchuk/Reuters
Russian LNG project on horizon
Petro-Canada and Russia's Gazprom have agreed to proceed with initial engineering on a $1.5 billion liquefied natural gas plant near St Petersburg, Russia, that would supply a Petro-Canada facility in Quebec.
The two companies said the will initiate preliminary engineering studies for the proposed Baltic gas liquefaction plant. That study will provide cost and timing for the facility.
The gas produced by the proposed plant would be shipped to the planned Gros Cacouna re-gasification plant in Canada that Petro-Canada and TransCanada are building.
Ron Brenneman, chief executive of Calgary-based Petro-Canada, said Gazprom will be offered an equity interest in the Canadian re-gasification plant, while Petro-Canada expects to own half of the Baltic liquefaction facility.
The operation would chill as much as 750 million cubic feet of natural gas a day into a liquid which can be shipped by tankers.
"Notionally what we are talking about is a 50-50 interest," Brenneman said on a conference call. "But the ultimate partnership is part of what needs to be determined between now and the end of the year."
Gazprom, one of the world's largest natural-gas producers would initially supply all the gas for the plant. However, Brenneman said Petro-Canada also wants to invest in Russian natural-gas fields, according to Reuters.
"We have an interest, ultimately, in acquiring the upstream resource that would back the supply coming out of the Baltic LNG project, but at this stage we're just talking about taking gas off the general grid...that Gazprom can supply," he said.
The plant is expected to be operational by 2010.