Gazprom pushes Exxon to drop China export plans

Gazprom, the Russian state-controlled gas giant, stepped up pressure on the ExxonMobil-led Sakhalin group to abandon plans to export natural gas to China on Tuesday, saying gas was required by domestic consumers.

Vladimir Kozlov, the head of Gazprom’s Sakhalin office, said, “Russia’s position as a partner in the production sharing contract is that Sakhalin-1 must prioritize the needs of Khabarovsk, Primorsk and Sakhalin regions”.

All gas production from the Sakhalin-2 project, where Gazprom bought a stake last year, had already been sold under long term contracts, he said.

The Sakhalin-1 group, the only foreign oil project in Russia not controlled by the government, began producing oil in 2004 from an offshore field in the Russian Far East but has delayed developing gas reserves until a suitable market is found.

ExxonMobil is negotiating to supply gas by pipeline to China, a move that would compete with Gazprom’s own plans to capture Chinese markets.

FT