Russia to buy Norwegian natural gas

Apr 11, 2005 02:00 AM

Although it has a third of the world's natural gas reserves, Russia faces so many difficulties in delivering gas to some remote areas that the northern Murmansk region is considering procuring Norwegian natural gas from the Barents Sea deposit of Snoehvit.
The region is one of the few areas in Russia that do not have gas pipelines and all the gas consumed there is liquefied and delivered by rail. There were initially hopes that a gas pipeline running through the region could be built when the Barents Sea's Shtokman gas field is developed. However, the current development plans are focused on a future $ 20 bn LNG production project.

Given that it cannot afford this, Gazprom has been negotiating an LNG deal with foreign investors for many years, but so far with little success. The field is expected to be put into production in 2010 at best.
Faced with another five years of waiting, Yury Yevdokimov, governor of the Murmansk region, offered Norwegian producer Statoil a market for Produced-produced natural gas that, according to Statoil Senior Vice President Tor-Ivar Pedersen, will be available from 2006.

Lev Snykov, an analyst with Sovlink brokerage, doubts that long-term supplies of Norwegian gas are on the table. He believes the purchases of Norwegian natural gas will become irrelevant when production of Shtokman LNG begins.
Alexander Razuvayev, chief analyst with financial company Megatrastoil, argues the governor only turned north for supplies after failing to find opportunities on the national market.

Source: Russian Information Agency Novosti
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