By Dmitry Zhdannikov
LONDON, Feb 27 (Reuters) - Russian gas giant Novatekand oil major Shell said on Wednesday Russiangas would remain more competitive in Europe than U.S. gas, asMoscow pursues new mega projects that would be insulated fromany new U.S. sanctions.
The United States has already imposed numerous sanctionsagainst Russian individuals and companies over Moscow'sinterference in Ukraine, alleged meddling in the 2016 U.S.presidential election, and accusations it was behind a nerveagent attack in Britain. Russia denies the allegations.
Washington is mulling new sanctions that could put furtherstrain on Russia's economy and companies. So far, there havebeen no sanctions affecting conventional or liquefied naturalgas (LNG) production in Russia.
Novatek's Chief Financial Officer Mark Gyetvay said thecompany would build all equipment and technology in Russia toprotect itself. "We will not hold ourselves hostage to U.S.sanctions," he told the IP Week conference in London.
He said Novatek was able to deliver LNG to Europe for $3.15per million British thermal units (mmBtu) comparing with $7-$8for U.S. producers.
"Russian gas will be very competitive versus the U.S. Gulfcoast," he said.
Gyetvay said Novatek was extracting gas at a cost of 10cents per mmBtu versus $3 in the United States, and liquefyinggas for 50 cents versus $3 in America.
Energy companies are flooding Europe with U.S. natural gas,establishing a foothold in a market dominated by Russia and seenas a key battleground in Washington's efforts to curb Moscow'senergy influence.
Gyetvay also said Novatek was raising its guidance for theproduction of sea-borne LNG to 70 million tonnes per year by2030 from 50-57 million tonnes previously.
The biggest producer of LNG in the world, Qatar, currentlyproduces 77 million tonnes per year and plans to reach 110million by the middle of next decade.
Shell, which has a long history of energy cooperation withRussia, said it had created a new 50/50 venture with Russianstate giant Gazprom that would use Shell LNG know-howto develop Russia's own technology for supercooling gas.
The venture will effectively insulate Russia from any newU.S. sanctions on LNG where technology belongs to only a handfulof players - mainly global oil majors such as Shell, Exxonand Total.(Reporting by Dmitry Zhdannikov; Writing by Vladimir Soldatkin;Editing by Jan Harvey and Mark Potter)
