Gazprom chief says focused on upstream in Libya

Energy Trade

Russian gas monopoly Gazprom’s priority in Libya is exploration and production but it also wants to develop opportunities in infrastructure including pipelines, the company’s head said on Wednesday.

Gazprom CEO Alexei Miller, speaking to reporters on a visit to Libya with Russian President Vladimir Putin, added that Gazprom had a “big interest” in taking part in a project to double gas export capacity along a pipeline across the Mediterranean to Italy. “Gazprom’s priority is geological research and extraction of oil and gas. Participation in infrastructure projects is secondary,” Miller said.

In 2006, Gazprom obtained an upstream foothold in the north Africa OPEC member country when it acquired four offshore exploration licenses in Libya. In December 2007 the company acquired another three licenses in the country. A source in the company said earlier this month that Gazprom was considering energy assets in Libya as part of a swap deal with Italy’s Eni.

Eni and Gazprom formed a strategic partnership in 2006, to focus on both upstream and downstream in the oil and gas sectors. The exchange of assets is part of the agreement. Eni recently agreed to double the capacity of a pipeline carrying up to 8 billion cubic meters a year of Libyan gas across the Mediterranean to Italy, taking annual volumes eventually to 16 billion cubic meters.

The gas is exported from a processing facility at Mellitah, on the Libyan coast, via the Greenstream underwater gas pipeline to southeastern Sicily. After that, the gas flows to the Italian mainland, and then onward to the rest of Europe. Miller said he expected that the planned expansion would involve construction of a second pipeline that would eventually see total capacity rise to 20 billion cubic meters. He added without elaborating that Gazprom hoped to get “new capacity” as a result of its asset swap with Eni. There was no immediate comment from Libya’s National Oil Corp (NOC), the state conglomerate in charge of all aspects of the country’s energy sector.

Gazprom has faced growing questions about the sustainability of gas supply from central Asia and has begun to extend its search for new reserves outside the region. Miller added, that Gazprom was interested in cooperating with Libya’s state investment portfolio in Africa as a means to further its involvement in the north of the continent. (Reuters)

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