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Bush, Putin Push Greater U.S.-Russian Energy Cooperation, Investments

The United States and Russia issued a joint pledge to focus on ways to reduce barriers to increased commercial energy partnerships and investments in energy projects, including Russian pipelines and the liquefied natural gas (LNG) business.

President Bush and President Putin said in their joint statement issued after a meeting in Bratislava in the Slovak Republic that they want their energy ministers to focus on ways to diversify energy supply, enhance energy security, improve business and market transparency and reduce obstacles to increased commercial energy partnerships.

"We call upon our ministers of energy and commerce to develop recommendations, which we can support at one of our upcoming meetings, on how to further intensify and develop our energy dialogue," the two leaders said. "Those recommendations will focus on identifying barriers to energy trade and investment, promoting initiatives to remove them on the basis of predictability, fairness and law, and suggesting specific proposals for cooperating in developing energy trade and investment."

They also promised to work toward making the tax, legal, regulatory, and contractual conditions in Russia more transparent for corporate cooperation on Russian pipeline development, which would lead to more exports of oil and natural gas to the U.S. and other markets.

"We are interested in increasing U.S. commercial investment in Russia, so as to create additional capacity for liquefied natural gas (LNG) in Russia, and also with the aim of increasing LNG exports to U.S. markets," they said. "We would welcome increased Russian oil exports to the world market and an increased presence of imports from Russia in the United States. We would also welcome expanding mutual investments in the energy sectors of both countries.

"The initiation of several concrete projects should be targeted for no later than 2008."

At a news conference following the meeting Putin noted that a large amount of Russian LNG could be headed to the United States starting in 2010. Russia has the world's largest natural gas reserves.

State oil giant Gazprom already has signed memorandums with ChevronTexaco Corp., ConocoPhillips, ExxonMobil, Petro-Canada, Norsk Hydro, Statoil and others on future gas production from the arctic Shtokman field as well as liquefaction projects, LNG exports and LNG delivery in North America. The Shtokman field, discovered in 1988, is estimated to contain more than 100 Tcf of gas.

Gazprom currently supplies about 25% of Europe's natural gas, and is said to be eager to penetrate the North American market.

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