Russ Oil-Gas

19 November 2008 - Reuters-Bloomberg-Moscow Times - Gazprom is considering U.S. majors ExxonMobil and ConocoPhillips for its liquefied natural gas projects in the Arctic Yamal Peninsula, Alexander Medvedev, the firm's deputy chairman, said Tuesday. "The list [of possible participants] is currently being made, but we're not ruling out majors such as ExxonMobil and Conoco from joining the project," Medvedev told reporters on the sidelines of a gas conference. CEO Alexei Miller met with ConocoPhillips CEO Jim Mulva on Monday to discuss exploring Alaska and other projects on LNG. Conoco could gain access to the Yuzhno-Tambeisky gas deposits in Yamal, said Medvedev, who oversees the company's exports. Royal Dutch Shell and Gazprom signed a preliminary accord in June to study LNG projects in Yamal, which means the "end of the world" in the local indigenous language. "Bringing global majors on board increases the chances of implementing such a complex project as Yamal, but doesn't guarantee it will be completed soon," said Artyom Konchin, an analyst with UniCredit. Ice-breaking LNG tankers, which do not yet exist, will have to be designed and built, he said. Gazprom, supplier of one-quarter of Europe's gas, holds around one-fifth of global gas reserves, of which more than 10 trillion cubic meters, or one-third, is on Yamal. The firm needs tens of billions of dollars to bring gas to its trunk pipelines. "The problem is these fields are so remote, the technology doesn't really exist to develop them yet," Konchin said. Medvedev's statements marked a major turning point in agreements between Gazprom and Alaska. "Recently, we had a meeting with top managers of Conoco and outlined potential areas of cooperation. One of these areas [involves] the Arctic, both in the United States and Russia. … They are very similar." Also at the conference Tuesday, Nord Stream's financial director said the Baltic Sea gas pipeline is on track to deliver its first gas in the fourth quarter of 2011 as promised. "We're absolutely on track to deliver the project on time, and we are in budget," financial director Paul Corcoran said. His comments came as a relief to those supporting the 7.4 billion euro ($9.34 billion) project, which Medvedev said Tuesday could be scrapped if Europe continues to delay the project. Russia could opt for tanker exports of liquefied gas if Europe drags its feet on pipeline projects, he said. The European Union has identified the plan to pump 55 billion cubic meters of Russian gas annually to Europe via Germany as a key project to ensure secure gas supplies for Europe. But EU lawmakers have called for a new investigation into the Nord Stream's environmental impact. Corcoran dismissed fears that the global financial crisis could dent the project's feasibility. "It is true that liquidity isn't there as it was two years ago," he said, adding that 30 percent of Nord Stream's financing will come from shareholders' equity and the remainder of 70 percent from the project finance market.