UPDATE 1-Gazprom sees deal to build pipeline to Britain in 2013

Wed Nov 14, 2012 10:10pm IST

Stocks

   

* Gazprom says BP interested in Nord Stream extension

* BP free to pursue new business in Russia after agreeing sale of TNK-BP

* Gazprom agreed longest-ever spot based term deal with Centrica

* Seeks more European storage

By Denis Pinchuk

MOSCOW, Nov 14 (Reuters) - Russia's Gazprom could sign a preliminary deal to extend its export pipelines to Britain next year, a project in which the Russian gas export monopoly has attracted interest from BP, it said.

Gazprom's Chief Executive Alexei Miller said in June the British major was interested in participating in an expanded Nord Stream pipeline which would deliver Russian gas straight to Britain.

At the time, industry sources said BP's interest in Nord Stream brought objections from its partner in TNK-BP, which had insisted on sticking to an obligation to explore business opportunities only in Russia through their joint venture.

But BP and the four tycoons who share control of the No. 3 Russian oil producer agreed to drop that obligation after agreeing to sell TNK-BP to Russian state oil company Rosneft , leaving BP free to pursue new ventures in Russia.

A BP spokesman was not immediately available for comment.

Nord Stream's first two phases, with a total capacity of 55 billion cubic metres of annual export capacity, stretches from Russia's Baltic coast to Germany. The second phase was launched last month but is not pumping at full capacity.

On a practical level, sources in British energy circles in Moscow say Nord Stream is unlikely to reach Britain before 2018.

Gazprom's marketing and trading division has business in Britain, and Gazprom's export division, which is highly critical of low liquidity on spot markets on the European continent, says it views Britain's National Balancing Point as viable for pricing of its gas.

Gazprom M&T signed its longest-ever spot indexed contract with Centrica in September, selling 2.4 billion cubic metres of gas for delivery to the British utility via the sub-sea interconnector between Belgium and Britain over three years starting in 2014.

In the report, it also said it aimed to increase its European storage capacity to 4.8 billion cubic metres in the coming two years. Its main European storage asset is a 2.8 bcm underground storage facility at Haidach, Austria.

In an asset swap with BASF, Gazprom will take full control of that facility and two European storage facilities as well as European trading units in return for an increased role for BASF's oil and gas unit in a Siberian upstream project.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Market at Record

Market at Record

Sensex, Nifty hit record highs; reforms outpace hawkish Fed.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Samsung Results

Samsung Results

Smartphone woes drag Samsung Elec Q3 profit to more than 3-year low.  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage