December 1, 2009 / 4:25 PM / 10 years ago

Statoil, Gazprom sign LNG, gas deals for U.S.

OSLO (Reuters) - 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.

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 October 1, and provides us with gas supplies in areas of strategic importance,” he added.

Gazprom will receive access to 50 million cubic feet per day, or 0.5 billion cubic meters per year of regasification capacity at the Cove Point terminal starting in 2010.

In addition, Gazprom will receive long-term access 2 billion cubic meters 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.”

COVE POINT HUB

Under a separate 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 finalize during the first quarter of 2010, was an “important broadening of the successful” relations between Gazprom and Statoil.

Statoil 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.

Editing by Anthony Barker

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