Gazprom signs deal with Malaysian Petronas

Jun 14, 2007 02:00 AM

Gazprom and Malaysian Petroliam Nasional (Petronas) have signed a memorandum of cooperation on the production, transport and storage of natural gas.
The companies have no specific projects yet. Analysts say that Petronas is a very successful gas exporter that may be helpful to Gazprom for dividing spheres of influence on the liquefied natural gas market and setting prices.

Gazprom deputy chairman Alexander Medvedev and Petronas president Mohd Hassan Marican met at the 12th Asian petroleum conference in Kuala Lumpur. The memorandum they signed foresees joint projects in Malaysia, Russia and third countries and sets out the principles of cooperation for the construction of gas infrastructure, including pipelines, underground reservoirs and regasification terminals.
Malaysia has proven reserves of 2.4 tn cm of gas. Last year, production of natural gas there reached 62.8 bn cm.

Consumption of gas amounted to 33 bn cm. The country's energy balance consists of 49 % natural gas, 39 % oil, 10% coal and 2 % electricity.
Petronas was founded in 1974. It is fully state-owned and has a monopoly right to use and export hydrocarbon resources in Malaysia.

Experts say that Gazprom does not need Malaysia as a resource base, but as partner in the high-confidence group formed in April in Doha on Russia's initiative as a kind of “gas OPEC.”
The Asian market for liquefied natural gas is growing rapidly. Japan, South Korea, Taiwan and India buy their liquefied natural gas almost exclusively from Petronas. Some 60 % of liquefied natural gas sales take place in Asia, and Petronas accounts for 15 % of the world's exports of that substance.

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