Gazprom Announces Talks with JGC on Vladivostok LNG Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--Russia's state-owned natural gas exporter, OAO Gazprom (OTC:OGZPY) (Moscow, Russia), announced that it held talks with JGC on the possibility of cooperation on the Vladivostok liquefied natural gas (LNG) project. Gazprom Chairman Alexey Miller and Yoshihiro Shigehisa, Chairman Emeritus of the JGC Group, attended a meeting during the St. Petersburg International Economic Forum 2013. The parties agreed that JGC's experience and state-of-art-technology could contribute to the Vladivostok LNG project.

Gazprom hopes to expand its presence in Asia amid falling sales in Europe. "Gazprom Vladivostok LNG will offer as much as 49% participation to foreign companies that will buy gas of not less than 6 million tons," said Vitaly Markelov, Deputy CEO of Gazprom, to journalists in Moscow on June 13.

The Vladivostok LNG project received a final investment decision by Gazprom in February 2013, but the engineering, procurement and construction contract remains undecided. In Russia, three LNG projects are beginning: Gazprom's Vladivostok, Novatek's Yamal and Rosneft's Sakhalin-1.

In the last fiscal year, the Japanese government bought 86.9 million tons of LNG after the 2011 nuclear disaster in Fukushima idled all but two of its atomic reactors.

"Japan and South Korea bought 52% of the world's LNG last year and offered the highest profit for suppliers," said Charles Blanchard, an analyst at Bloomberg New Energy Finance (BNEF) in London.

In the Russia-Japan LNG project, production is scheduled to start by 2018, and annual output is estimated at about 15 million tons.

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