Gazprom, the Russian national oil company, has announced it is setting up a Houston office to further its business of LNG (liquefied natural gas) deliveries to the United States. The subsidiary, Gazprom Marketing and Trading USA (GMT USA), is an offshoot of its British group, Gazprom Marketing and Trading Ltd.
The announcement said the new company will market LNG and natural gas in America and will work on “the long-term development of the activities of Gazprom in the country,” according to a report in the Russian daily online news agency Kommersant. Gazprom has been working with major oil companies and others to gain the backing to develop its 113 Tcf Shtokman Field in the Barents Sea and for gasification and export facilities on the Baltic Sea near St. Petersburg, Russia.
Having begun to deliver gas to the U.S. in 2005 in a cooperative deal, the Russian gas monopoly is planning to move to the direct delivery of liquefied natural gas, and it aims to snap up 20% of the market, a share that could grow from 18 billion cubic meters in 2005 to 40-50 billion cubic meters in 2010, Kommersant said. It called the United States, the fastest developing market for LNG.
In a four-company transaction last winter Gazprom completed its first swap of pipeline gas on the Continent for an LNG cargo with Gaz de France, Med LNG & Gas and Shell. Under the deal, Gazprom delivered additional pipeline gas to Gaz de France in Europe and in return purchased an LNG cargo from Med LNG & Gas, a joint venture of Gaz de France and Sonatrach. The LNG cargo was being sold to Shell Western LNG for delivery to the Cove Point, MD import terminal (see Daily GPI, Nov. 28, 2005).
In another potential deal, Gazprom is working on preliminary engineering and cost studies with Petro-Canada on a $1.5 million Baltic Sea gasification terminal. Exports would go to the proposed Gros-Cacouna LNG import and regasification terminal in Quebec being developed by PetroCanada and TransCanada. (see Daily GPI, March 20).
Russia’s plans for the first stage of development for the Shtokman Field would include 1 Tcf of supply, about 80% of which would be converted to LNG and shipped overseas. Shtokman’s annual production could reach more than 9 Bcf/d, according to some estimates. LNG shipments to the United States are targeted for late 2010 or 2011.
The general director of GMT USA will be John Hattenbergen, who has worked on exploration, extraction, and marketing of gas and liquefied natural gas for Marathon Oil, BP, El Paso Global LNG, and TransCanada Pipelines Ltd.
Gazprom plans to send five or six additional tankers to the U.S. Between 2006 and 2009, the company told Kommersant. It also is seeking to obtain shares in or to rent space at one of the terminals for liquefied natural gas on the U.S. East Coast and Gulf of Mexico and to begin delivery of liquefied natural gas under long-term contracts (of up to three years).
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