By OGJ editors
HOUSTON, July 7 -- Royal Dutch/Shell Group and Russian gas monopoly OAO Gazprom signed a memorandum of understanding to swap shares in western Siberia's Zapolyarnoye field and the Sakhalin II project.
The pending transaction marks Gazprom's entry into the LNG sector. The MOU calls for Gazprom to acquire as much as 25% plus one share in Sakhalin II. Shell plans to acquire a 50% interest in Zapolyarnoye's Neocomian gas-condensate reservoirs, about 200 km northeast of Urengoi gas field in northern Russia.
The difference in value between the assets will be defined and compensated through a package of cash and other assets, the companies said. The transaction is expected to close in 2006.
Sakhalin II will facilitate year-round oil and gas production in northern Sakhalin Island by piping it through two large-diameter onshore oil and gas pipeline systems to ice-free ports in southern Sakhalin (OGJ Online, Mar, 16, 2004).
The consortium formed to manage the project is Sakhalin Energy Investment Co. Ltd. Current ownership is Shell Sakhalin Holdings BV with 55% interest, Mitsui & Co. Ltd. subsidiary Mitsui Sakhalin Holdings BV with 25%, and Mitsubishi Corp. subsidiary Diamond Gas Sakhalin BV, 20%.
