Sakhalin woe: Gazprom wants the kremlin to halt gas exports from Sakhalin 1 to China
Gazprom bids to halt Sakhalin 1 exports
Russian gas giant Gazprom wants the government to stop the ExxonMobil-led Sakhalin 1 development from exporting gas to China, according to Russian news agency reports published today.
Both the Interfax and Itar-Tass news agencies quoted Gazprom's deputy chief executive Alexander Ananenkov as saying Sakhalin 1's gas was needed to supply Russia's Far East and a plan to export 8 billion cubic metres per year to China would leave the domestic market short of gas.
"Demand in the four Far Eastern regions alone is more than 15 Bcm," Ananenkov told a meeting of Russia's Far East socioeconomic development council, chaired by Prime Minister Mikhail Fradkov.
"We consider it necessary for a directive to be issued and Sakhalin 1 gas to be sold to Gazprom, so we could supply gas to Russia's regions, and for the gas not to exported as proposed by Exxon Mobil," Ananenkov said.
Gazprom told Reuters earlier this month that it was in talks with Sakhalin 1, whose shareholders also include Rosneft, India's Oil & Natural Gas Corporation and a Japanese consortium, to buy all its gas.
Earlier this year Gazprom bought control of the Sakhalin 2 project, previously controlled by Shell, which neighbours ExxonMobil's venture on the Pacific Sakhalin Island.
Gazprom is keen to secure more gas supplies in the region to feed Sakhalin 2's huge gas liquefaction plant, which could be expanded if there is enough supply.
The two projects are production sharing agreements, protecting them from Gazprom's legal monopoly on gas exports.
Gazprom also wants to get involved in developing Sakhalin 3, a licence that Russia might award later this year or next. Ananenkov said it could be on stream in 2014, until when Gazprom would need Sakhalin 1's gas to meet Russian demand.
Gazprom is in talks with BP and its Russian venture TNK-BP about TNK-BP's Kovykta gas field in Eastern Siberia, which cannot be fully exploited for the Chinese export market without Gazprom's co-operation, which has not been forthcoming.
TNK-BP, which is under threat of losing the licence for the field, has said it would welcome Gazprom as a controlling shareholder in Kovykta.
Gazprom has said any agreement was likely to be part of a much wider deal and may involve other BP and TNK-BP assets in Russia or abroad. It has also said it is interested in Sakhalin 4 and Sakhalin 5, each 49% owned by BP.