Gazprom and Shell ink MoU on Baltic LNG

Russia’s Gazprom and Hague-based LNG giant Shell signed on Thursday a memorandum of understanding regarding the Baltic LNG project.

Under the MoU, the two companies will expand their cooperation in the LNG business and study the possibilities for the construction of an LNG export plant in the port of Ust-Luga in the Luga Bay of the Gulf of Finland.

The liquefaction and export plant will have a capacity of 10 million mt of LNG a year.

The memorandum was signed by Shell’s CEO Ben van Beurden and head of Gazprom Alexey Miller in Saint Petersburg.

Earlier this week, Gazprom Deputy CEO Alexander Medvedev said that the LNG plant could produce up to 20 million mt of LNG per year with first production scheduled for 2021.

Gazprom and Shell are already cooperating on Russia’s sole LNG export plant on Sakhalin island, built within the Sakhalin II project, which currently has an annual production capacity of 9.6 million mt. The agreement to add a third liquefaction train to the LNG plant at Prigorodnoye was signed in June last year.

“Shell and Gazprom are convinced that LNG and natural gas in general have great prospects. Over the past year, we made great efforts to advance our strategic cooperation. Today, Shell’s primary focus in Russia is the expansion of the Sakhalin II project and the establishment of a world-class LNG center in Russia’s Far East. At the same time, we continue to consider new avenues for collaboration in the energy sector,” said Ben van Beurden.

LNG World News Staff