Russ Oil-Gas

22 September, 2008 - Upstream OnLine - Russian gas export monopoly Gazprom said today it will liquefy some of the gas produced as a result of its co-operation agreement with Venezuela to develop gas on the Latin American country's shelf. "Exploration and production of natural gas on the shelf will be delivered to the domestic market and will also be liquefied for export," Reuters quoted Gazprom as saying in a statement, without saying where the liquefied natural gas would be shipped. Gazprom and Venezuela clinched an exploration and production deal last week in talks between Venezuelan state energy company PDVSA, the country's president Hugo Chavez and Gazprom chief executive Alexei Miller. Gazprom did not name the amount of financing needed for the project or projections of production or reserves. Venezuela also struck deals on Friday for natural gas projects in the Caribbean with other foreign companies, including Chevron . As well as Chevron and Gazprom, Italy's Eni, Qatar Petroleum, Japan's Mitubishi Corporation, Mitsui, Itochu and Malaysia's Petronas signed the accords to work on the offshore gas projects, the Venezuelan government said. The deals help make Chavez's case that his Opec nation can work with foreign investors despite his deteriorating relations with the Bush administration. Gazprom, which is the largest gas producer in the world and supplier of a quarter of Europe's gas, has said it will add some 90 million tonnes of the super-cooled LNG fuel to its production by 2030, making it a global player with a quarter of the market. The company now has no LNG production of its own, but will get the first volumes next year when it launches its Sakhalin-2 project together with Shell and Japanese companies. The project in the Pacific waters will ultimately produce 9.6 million tonnes, entitling Gazprom to 4.8 million tonnes of LNG per year. It also wants to launch its landmark Shtokman Barents Sea field in 2013 with first LNG production expected at a few million tonnes in 2014. Gazprom also said it will look at other exploration and development projects in Venezuela. In July, Chavez met with Russian president Dmitry Medvedev in Moscow, where a Kremlin source said Venezuela's state energy company PDVSA was planning several deals with Gazprom, Russia's second-largest oil company Lukoil and BP's Russian arm TNK-BP . Last week, Gazprom and France's Total committed to investing up to $4.5 billion in a natural gas project in Bolivia.