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Business news, 17.03.2006 12:45

Petro-Canada in LNG deal with Gazprom

pertocanada_gazprom PETRO-Canada said on Tuesday it and partner OAO Gazprom are planning a liquefied natural gas (LNG) plant near St Petersburg, Russia, worth up to US$1.5 billion (US$1 = RM3.71), that would supply gas to Petro-Canada and other customers by 2010.

The two companies will go ahead with engineering studies for the proposed Baltic gas liquefaction project to provide cost, size and timing for the plant, Petro-Canada said in a statement. The preliminary work is expected to be completed by year-end.

Most of the gas produced by the proposed plant would be shipped to the planned Gros Cacouna re-gasification plant in Canada owned by Petro-Canada and TransCanada Corp.

There are dozens of new LNG import terminals planned for the US and Canada as demand for the fuel rises while North American supplies are dwindling. However few of those facilities have locked up the offshore gas needed for their projects.

Indeed, Anadarko Petroleum Corp said on Tuesday it would delay construction of its US$650 million Bear Head LNG import terminal in Nova Scotia while it tries to secure gas supplies for its project.

Teaming up with Russia’s Gazprom, the world’s biggest gas producer with daily production of 58.5 billion cu ft, will give the Gros Cacouna project a guaranteed gas supply. That facility, on the south shore of the St Lawrence River outside Riviere-du-Loup, Quebec, will supply up to 500 million cu ft a day of imported natural gas to eastern Canada and the US Northeast.

“Gazprom produces more than three times Canada’s total gas production,” said Martin Molyneaux, an analyst with FirstEnergy Capital Corp in Calgary. “But Petro-Canada will bring marketing expertise and a location to land the gas in North America.” — Reuters

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