|
Price of admission high for Petro-Canada Gazprom wants downstream LNG stake for gas supplies from Shtokman; says it has ‘support and cooperation’ in Canada Gary Park For Petroleum News
If nothing else, Petro-Canada now has a better idea what it will take to enter the liquefied natural gas business.
To get a lot it may have to give a lot.
That’s effectively the word from Russian gas giant Gazprom to the Canadian company and any others who hope to secure supplies from the massive Shtokman field in the Barents Sea.
Petro-Canada may have to bring Gazprom closer to consumers to get the 25-year supply contract Petro-Canada has been working on for almost three years as feedstock for its planned Gros Cacouna LNG terminal in Quebec, a joint venture with TransCanada.
To achieve that goal, Petro-Canada may have to help provide Gazprom with a stake in the downstream end.
In a Dec. 1 conference call with North American reporters, Gazprom Deputy Chairman Alexander Medvedev indicated his company — whose shares are owned 50 percent plus one by the Russian government — wants a “substantial” stake in Canada and the United states as a supplier of LNG and an owner of infrastructure and E&P assets.
He said Gazprom, which already has exploration programs in India, Vietnam, Algeria, Libya and Venezuela, is eager to diversify its “upstream base beyond the Russian border. Why not the United States? And Canada.”
When it comes to the North American market, “we would like not just to produce ... but to be as close to the consumer as possible.”
Medvedev said Canadian officials seem to be more receptive than those in the U.S., even though the government of Prime Minister Stephen Harper recently indicated it plans a more rigorous review procedure before allowing foreign state-controlled companies to make major acquisitions in Canada.
China has already moved into the oil sands, with India and Korea signaling their interest in joining the trend.
Gazprom didn’t see Canadian opposition Natural Resources Minister Gary Lunn said investment by the Chinese government companies is acceptable to Canada so long as it is limited to minority stakes in joint ventures.
Medvedev said the prospect of Gazprom investment in Canada has been favorably received.
“We didn’t see any opposition during our meetings with government representatives of Canada,” he said. “We only felt support and cooperation between Gazprom and Canadian companies.”
In fact, four months ago at the G8 summit, Harper and Russian President Vladimir Putin issued a joint statement promoting the stabilizing role LNG project could play in global energy markets.
They pledged to “take measures both nationally and internationally to facilitate investments into a sustainable global energy value chain to ... develop global LNG markets.”
“To reduce huge investment risks and facilitate smooth functioning for the emerging global LNG market, we will seek to create appropriate investment conditions,” the two leaders said.
Putin also endorsed efforts to reach a supply agreement between Gazprom and Petro-Canada
Major purchases in U.S. would likely face opposition However, Medvedev conceded that any move by Gazprom to make major purchases in the U.S. would likely encounter the same opposition that scuttled a bid by China National Offshore Oil Corp. to buy Unocal and by Dubai Ports World’s bid to take over management of U.S. ports.
He argued that Gazprom is little different from any other state-owned companies, describing the company as “a commercially driven and value driven enterprise. All of the accusations that say we are manipulated by the Kremlin are absolutely absurd.”
Medvedev said Gazprom, which meets 26 percent of Europe’s gas needs, would be in compliance with North American legislation, just as it is in Europe.
His message was a distinct shift in tone from remarks earlier this fall by Gazprom chairman Alexey Miller who said Gazprom would develop the Shtokman field without foreign partners, focusing instead on building pipelines to European markets.Medvedev rejected any suggestion that Gazprom might have difficulty serving markets in Europe, Asia and North America, saying it has “enough reserves to meet both local demand and all our export obligations including potential sales to new markets.”
For the Baltic LNG project he said Gazprom will soon narrow down the list of candidates for a production consortium to two or three companies. In addition to Petro-Canada, contenders have been Chevron, ConocoPhillips and the two Norwegian companies, Norsk Hydro and Statoil.
| 