Russ Oil-Gas

Tuesday, August 8, 2006 - The Moscow Times (AP, Bloomberg) - Italian oil and gas group Eni wants to complete a deal with Gazprom that would give the Italian company direct access to Russia's huge hydrocarbon reserves, Eni's general director said in an interview published Monday. In exchange, Eni would help Gazprom expand into the European market, Paolo Sarconi said. "We are suggesting to Gazprom that we conclude a strategic cooperation agreement in which the presence of Eni in exploration and production in Russia would be assured," Sarconi was quoted as saying in an interview with Vedomosti. "We think that Eni in this situation could be of great help to Gazprom in developing new fields and in access to the European retail market." Sarconi said Eni was looking into the possibility of participating in Gazprom's Baltic LNG project, which foresees the construction of a liquefaction plant near St. Petersburg at an estimated cost of $2.5 billion. The facility would be capable of processing 8 billion cubic meters of gas per year. Gazprom has teamed up with PetroCanada in the project. Gazprom's stated strategy is to expand its presence in the gas supply chain from its Siberian well-heads to the homes of European consumers. In exchange for access to lucrative retail markets, the company has said Western oil and gas firms will be offered a chance to develop Russia's reserves, where major new fields lie in inhospitable provinces offshore or in eastern Siberia.