Gazprom and Shell address Sakhalin II expansion and Baltic LNG project
A working meeting between Alexey Miller, Chairman of the Management Committee of Gazprom, and Ben van Beurden, Chief Executive Officer of Royal Dutch Shell, took place today at the St. Petersburg International Economic Forum 2017.
The heads of the companies discussed the global energy markets and the relevant matters of cooperation. Specifically, the parties addressed further steps in the expansion of Sakhalin II and the current status of the Baltic LNG project, as well as the partnership prospects under the Agreement of Strategic Cooperation.
Royal Dutch Shell is a British-Dutch oil and gas holding company focused on hydrocarbon production, processing and marketing in over 90 countries worldwide.
Gazprom and Shell are jointly engaged in the Sakhalin II project, which includes Russia's only active LNG plant. The Sakhalin II operator is Sakhalin Energy Investment Company Ltd. (Gazprom – 50 per cent plus one share, Shell – 27.5 per cent minus one share, Mitsui – 12.5 per cent, and Mitsubishi – 10 per cent). In 2015, Gazprom and Shell signed the Memorandum to construct the third production train of the LNG plant, as well as the Agreement of Strategic Cooperation providing for the expansion of the companies' joint project portfolio, including a potential asset swap. In 2016, the LNG plant produced upward of 10.9 million tons of LNG, exceeding the design capacity by over 1.3 million tons.
In June 2016, Gazprom and Shell signed the Memorandum of Understanding on the Baltic LNG project. The document reflects the parties' intention to explore the prospects for cooperation within the project.