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Share Price: 486.70
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BP eyes gas from Russia's Yamal LNG project - sources

Wed, 22nd May 2013 13:25

* Yamal to produce 15 mln tonnes of LNG annually from 2018

* Aims to sell gas to Britain, Europe in winter

* Plant is intended to supply higher-priced Asian markets

MOSCOW/PARIS, May 22 (Reuters) - BP has been indiscussions to secure liquefied natural gas from Russia's YamalLNG project, which is being jointly developed by Novatek and Total, sources close to the talks toldReuters on Wednesday.

"There is interest from BP, but it's still too early to talkabout any concrete agreement," one of the sources said,requesting anonymity.

The project in Russia's Arctic Yamal peninsula is slated toproduce 15 million tonnes of LNG per year from 2018.

It is facing headwinds including the need to acquire rightsto export gas from Russia.

Currently, only state-owned Gazprom is able toship gas outside of the country.

The Russian authorities have signalled they may allowNovatek and other companies to sell LNG abroad, but only undercertain conditions, including agreed contracts with consumers.

Novatek has said it has reached preliminary agreements tosell around 80 percent of LNG from the project.

"Among the various European and Asia companies thatexpressed an interest, a certain number of HOAs were signed," asecond source said, referring to so-called heads of agreements,which are non-binding outline deals.

Last month, a Total official said partners in the projectwere in talks to ship cargoes to Britain and northwest Europe inwinter.

Gazprom supplies around a quarter of Europe's gas throughits export pipeline network, while the planned Yamal LNG exportplant is intended to supply higher-priced Asian markets, whereRussia currently sells little gas.

It is expected that exact details of how much LNG will besold to Europe and to which specific companies and terminalswill be announced in a few months.

Novatek and Total spokespersons in Moscow refused tocomment. No immediate comment was available from BP in London.

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