Russ Oil-Gas

Sep. 17, 2007 - Kommersant - Spanish Prime Minister Jose Luis Rodriguez Zapatero will come to Moscow on September 28 to discuss Spanish companies doing business in Russia. In particular, he will press for the inclusion of the Spanish electric company Iberdrola in Baltic LNG, the joint construction with Gazprom of a liquefied natural gas project in St. Petersburg. Fourteen companies took interest in Baltic LNG when it was founded in late 2005 as a joint venture between Gazprom (80%) and Sovkomflot shipping line (20%). The new company is to produce 5 million tons of liquefied natural gas per year for 25 years, beginning in 2011-2012. In April, the number of contenders, according to Baltic LNG chairman Alexander Krasnenkov, had been reduced to four “Canadian, European and Japanese” companies. That list is said unofficially not to include the Spanish company. Iberdrola operates in Spain, the United States, Great Britain and Latin America, selling electricity, as well as 4.3 billion cu. m. of natural gas per year. The company's receipts for the first half of the year were €6.7 billion, and its profit €1.1 billion. Deputy chairman of the Gazprom management board Alexander Medvedev stated in June that the decision on investment in the project would be made “in the next few weeks,” the illness of Gazprom head Alexey Miller delayed that decision, and a number of others. Valentin Golubev, another member of the Gazprom board, stated that the decision may now be made on September 25, that is, before the Spanish prime minister's arrival. Spain has a selling point, however. That is that Gazprom has not yet entered the Spanish market. Delivering gas to Spain by pipeline of railcar would be unprofitable, but liquefied natural gas, delivered by sea in tankers is possible.