UPDATE 2-Gazprom says nears deal on Exxon's Sakhalin-1 gas

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By Denis Dyomkin

KHABAROVSK, Russia, Feb 7 (Reuters) - Russian gas export monopoly Gazprom (GAZP.MM) will sign a deal to buy the entire annual gas output from the Sakhalin-1 field of U.S. oil major Exxon Mobil (XOM.N) in April-May, an executive said on Thursday.

The move will mark another milestone in the Kremlin's drive to bring large energy assets back under state control and allow Gazprom, the world's largest gas company, to get hold of more resources without tapping its own rich hydrocarbon base.

Gazprom came to Sakhalin last year, when Royal Dutch Shell (RDSa.L) was forced to sell control in its $22.5 billion oil and gas Sakhalin-2 project after months of state pressure, while Exxon was banned from exporting gas from Sakhalin-1 to China.

"We are talking to Exxon about buying this gas," Gazprom's deputy head, Alexander Ananenkov, told Gazprom Chairman and Russian First Deputy Prime Minister Dmitry Medvedev, seen as Russia's most likely next president after March elections.

"The dynamics (of talks) have recently been positive and we hope to sign a binding agreement with Exxon to buy 11 billion cubic metres of gas in April-May," he added.

Exxon and its partners -- Russian state oil firm Rosneft (ROSN.MM), Japan's Itochu (8001.T) and Marubeni (8002.T) and India's ONGC -- have invested more than $12 billion in Sakhalin-1 to launch oil production in 2006 and reached peak oil output of 250,000 barrels per day last year.

The companies also signed a deal to supply China with 8 bcm of gas a year and had hoped to start supplies from next decade.

But the plan ran into trouble after Gazprom said gas should be used to supply Russian Pacific regions. Some observers suspect gas would in fact be redirected to the liquefaction plant of Sakhalin-2 for exports to Asia.

Gazprom, the world's largest gas producer, itself has a rival plan to supply China from East Siberia via two links but talks have been stalled for a year due to price disagreement.

Gazprom has said it would be prepared to pay market prices for gas from Sakhalin and Exxon has said it would choose the most competitive offer. Exxon declined to comment on Thursday.

CHEAP GAS

Industry sources said on Thursday the U.S. major had no other choice but to sign the deal, regardless of the price.

Otherwise the firm would face the risk of being accused of gas production delays similar to those Gazprom used in its dispute over the large Kovykta field with BP's (BP.L) Russian venture, TNK-BP (TNBPI.RTS).