Sun, Sep 29, 2013 - Page 13 News List

Rosneft to expand into natural gas

AFP, MOSCOW

Russian oil giant Rosneft on Friday agreed to purchase the natural gas assets of top world diamond producer Alrosa for US$1.38 billion as it expands into a market dominated by its rival Gazprom.

Rosneft said it had also selected two contractors to design a liquefied natural gas (LNG) plant in Russia’s far east that it plans to operate under an agreement with US energy giant ExxonMobil.

Auditors at Texas-based DeGolyer and MacNaughton estimate that the three Siberian fields acquired by Rosneft from Alrosa contain 187 billion cubic meters of natural gas and 26.4 tonnes of gas condensate.

“The acquisition of Alrosa’s energy assets once again demonstrates the importance of gas business development of Rosneft,” the state-held firm’s chief executive Igor Sechin said in a statement.

Alrosa head Fyodor Andreyev said the diamond producer decided to part with its energy assets to focus more closely on its core business.

The gas liquefaction plant planned by Rosneft and ExxonMobil would produce 5 million tonnes of LNG per year by 2018. A key part of that business involves LNG sales to energy-hungry clients in Japan and other significant Asian markets.

Rosneft said it and ExxonMobil Russia have hired the design and engineering firms CB&I UK and Foster Wheeler Energy to develop the final plans for the plant and its accompanying gas liquefaction technology.

The plant is meant to be built on the Russian Pacific coast’s Sakhalin Island — a region that ExxonMobil first entered in 1996.

The project has been bitterly opposed by rival Gazprom and is yet to be approved by Russian President Vladimir Putin’s government.

Gazprom retains a monopoly over Russia’s natural gas exports and has resisted the idea of allowing firms such as Rosneft to strike its own agreements with foreign clients.

“We believe that such a project would be loss-making,” Gazprom’s eastern projects coordinator Viktor Timoshilov was quoted as saying by Interfax. “There is no need to build a plant. [Gazprom’s] existing infrastructure could avoid these expenses.”

This story has been viewed 1102 times.
TOP top