* Preliminary deals include natural gas and LNG transactions
* Gazprom to get regasification capacity at U.S. terminal
* Initial agreement to be finalised in Q1 2010
(Adds details, quotes)
By Wojciech Moskwa
OSLO, Dec 1 Europe's two biggest suppliers of
natural gas, Norway's Statoil ASA (STL.OL) and Russia's
Gazprom's (GAZP.MM), signed initial deals to import liquefied
natural gas (LNG) to the United States and trade energy there.
The preliminary deal, whose terms will be negotiated over
the coming months, comes at a time when U.S. gas markets are
plagued by low prices due to massive expansion of shale
production, which has reduced the need for LNG imports.
In a joint statement on Tuesday, the companies said the
deals include Gazprom gaining regasification capacity at the
Cove Point, Maryland, LNG receiving terminal.
Statoil will also sell natural gas to Kremlin-controlled
Gazprom at various U.S. locations, while purchasing LNG from the
Russian company at Cove Point.
"The regasification agreements... will provide a firm
foundation for our long term LNG supply strategy," said John
Hattenberger, President of Gazprom Marketing & Trading USA, a
downstream arm of the Russian gas giant that signed the deal.
"Our gas purchase agreement enables us to strengthen our
North American marketing and trading operation, which we
launched on Oct. 1, and provides us with gas supplies in areas
of strategic importance," he added.
Gazprom has said it seeks to gain 10 percent of the U.S.
natural gas market in the next 10 years, or about 168 million
cubic metres per day. Presently, U.S. LNG import terminals are
operating at less than 10 percent of capacity. [ID:nGEE5AP1RL]
Under the Statoil deal, Gazprom will receive access to 50
million cubic feet per day, or 0.5 billion cubic metres per year
of regasification capacity at Cove Point starting in 2010.
In addition, Gazprom will receive long-term access 2 billion
cubic metres per year of Cove Point capacity for 18 to 20 years.
The agreements include the release to Gazprom of take-away
Cove Point expansion pipeline capacity.
The deal also envisages Gazprom purchasing 1 bcm per year of
natural gas from Statoil at various trading hubs in the United
States for "more than five years".
SIGN OF CONFIDENCE?
The deal may be seen as a sign of confidence in the
long-term future of the U.S. gas market, which both companies
use to diversify away from core European consumers.
Closer downstream cooperation between the two gas giants
could also help Statoil's chances of gaining wider access to
Gazprom oil and gas exploration projects in Europe's far north.
Statoil already has a 24 percent stake in the development
company for Gazprom's giant Shtokman field in the Barents Sea,
which has enough gas to meet total world demand for a year.
In a planned 20-year agreement, Statoil will purchase 2 bcm
per year of LNG from Gazprom for delivery in international
waters to Statoil for regasification at Cove Point, an important
terminal for gas imports to the U.S. east coast.
"The agreement is an important step in Statoil's efforts to
ensure supply for our LNG-import and regas capacity at Cove
Point," said Irene Rummelhoff, Statoil's senior vice president
for International Gas Development in Natural Gas.
"It further underlines our ability to develop our gas
business in the United States where we, over a relatively short
time, have built a position in upstream conventional production,
shale gas and the LNG-import terminal Cove Point."
She said the deal, which both parties aimed to finalise
during the first quarter of 2010, was an "important broadening
of the successful" relations between Gazprom and Statoil.
(Additional reporting by Edward McAllister in New York, Editing
by Anthony Barker and Keiron Henderson)
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