Petro-Canada dabbling in LNG field, looking at plant in Russia

Gary Park

Petroleum News Calgary correspondent

Petro-Canada is going top shelf as its starts to explore the liquefied natural gas supermarket. The Calgary-based integrated has cozied up to gas giant Gazprom as it explores the possibility of a C$1.8 billion LNG plant in Russia — the first foray by a Canadian E&P company into the LNG world, although pipeline companies TransCanada PipeLines and Enbridge are actively seeking a deal.

Both Petro-Canada and Gazprom, which controls 25 percent of the world’s gas reserves, have indicated they are engaged in tentative discussions, although Petro-Canada refuses to characterize the talks as being at the stage of a full proposal. A spokeswoman for Petro-Canada, reacting to a disclosure by Gazprom deputy chief executive officer Alexander Ryazanov, told the Calgary Herald May 26 that the conversations are “very early days ... to say there is a proposal on the table would be stronger words than we would use.”

However, she conceded that Petro-Canada is attracted to Gazprom because of its size and scope and its array of assets.

Russian news reports say Petro-Canada is weighing an LNG plant at St. Petersburg that is capable of handling 3 million to 5 million tons a year of gas from Gazprom’s Siberian fields.

An LNG venture would be consistent with Petro-Canada’s global ambitions since its takeover of Germany’s Veba Oil & Gas two years ago for C$3.2 billion which has opened up Europe, Africa, Asia and South America to a company that was once Canada’s state-owned oil firm.