Gazprom, TNK-BP discuss cooperation on gas projects

Energy Trade

OAO Gazprom and BP Plc's Russian venture are looking at working together in the country's east, where the state-run natural gas export monopoly has opposed TNK-BP's proposals to ship fuel directly to Asia.

OAO Gazprom CEO Alexei Miller and Viktor Vekselberg, TNK-BP's executive director of gas development, met today to discuss cooperating on projects and developing petrochemical production in the region, state-owned Gazprom said in an e-mailed statement. The company provided no additional detail. Miller also met Eni SpA CEO Paolo Scaroni in Moscow yesterday to discuss possible asset swaps under an agreement they signed on November 14, Gazprom said.

Rome-based Eni, Europe's fourth-biggest oil company, said in a statement said it made a „step forward” in its talks, without elaborating. TNK-BP, the second-largest privately owned oil company in Russia, has been lobbying for the right to build a pipeline and export natural gas directly from its $18 billion Kovykta gas field in Irkutsk, eastern Siberia, to China or Korea. Gazprom's right to control exports was set in law this year. Gazprom said last year that that development of the field, which holds 2 trillion cubic meters of gas, enough to power Asia for about six years, could be delayed until 2015.

Gazprom may start drilling at an abutting field, South Kovykta, next year. Russia's Natural Resources Ministry said it will review possible violations of the Kovykta license early next year. TNK-BP has said it can't produce as much gas as the license requires because the regional market isn't large enough to absorb it. BP CEO John Browne met with Miller last month to talk about possible joint projects. The two men will meet again in the Q1 of next year.

Scaroni said December 1 that his company wants to buy two natural-gas production sites, costing less than $10 billion, in Russia. Eni is looking to bid for bankrupt OAO Yukos Oil Co.'s OAO Arcticgaz, which holds licenses to develop gas fields in the Yamal-Nenetsk region of western Siberian. Gazprom and TNK-BP's unit, OAO Rospan, also hold licenses in that area. (Bloomberg)

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