Russ Oil-Gas

MOSCOW, June 9, 2009 (UPI) -- An increase in gas prices will finance liquefied natural gas projects for Gazprom and possible expansion into North America, company officials said. Alexander Medvedev told the Russian-language Ekho Moskvy radio station that he predicted third- and fourth-quarter price increases, suggesting those trends positioned Gazprom for exports into U.S. markets. In February, Russia opened its first LNG plant on Sakhalin Island to supply mostly Asian markets with natural gas from the nearby facility. Medvedev said that gas eventually could reach American markets through Mexico, the Interfax news agency reports. "We already have the opportunity to ship Sakhalin gas to the U.S. market via the Baja regasification terminal in Mexico, we have reserved pipeline capacity and we're prepared to work on that market and will do so," he said. On the regional transit network, Medvedev insisted the Russian Nord Stream pipeline to Germany and the South Stream pipeline to southeastern Europe were meant to diversify the energy sector, not secure Russian dominance. A January price and contract row between Kiev and Moscow prompted Gazprom to cut gas supplies to Ukraine for weeks. That put renewed focus on the need to diversify the regional oil and gas transit network as 80 percent of Russian gas for Europe travels through Soviet-era pipelines in Ukraine.