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UPDATE 1-Russia's Rosneft says Gazprom hinders its LNG project

Fri, 25th Apr 2014 06:35

* Rosneft's CEO Sechin says company needs to export gas

* Sechin says Gazprom, Shell deny Rosneft, Exxon access topipeline (Adds detail, quotes)

By Denis Dyomkin

KHABAROVSK, Russia, April 25 (Reuters) - Rosneft ratcheted up pressure on fellow Russian energy champion Gazprom on Friday, asking the government to intervene in a rowwith the gas producer as Rosneft seeks to strengthen its controlover vast hydrocarbon resources.

Rosneft, headed by Igor Sechin, a powerful ally of RussianPresident Vladimir Putin, has long challenged Gazprom's monopolyrights to export natural gas via pipelines, which so far serveonly clients in Europe, where Gazprom generates over half of itsrevenues.

On Friday, Sechin again called on the government to allow itto export gas via pipeline and asked for help in gaining accessto Gazprom's trunk gas pipeline, vital for the liquefied naturalgas (LNG) project Rosneft is planning with ExxonMobil.

Sechin said that since Rosneft has large gas resources ofgas in sparsely populated Eastern Siberia, it needs to sell theexcess abroad.

"East Siberia has gas reserves in excess of 7 trillion cubicmetres... And domestic demand has been limited so far. The taskof expanding export capabilities arises in conditions like that,of course, including for independent (non-Gazprom) producers,"Sechin told a government meeting in the far eastern city ofKhabarovsk.

Rosneft and Russia's No.2 gas producer Novatek have secured rights to export seaborne LNG, successfullychallenging Gazprom's monopoly.

Gazprom still retains exclusive rights to export gas viapipelines, which so far have only been plugged to clients inEurope where the company generates half of its revenues.

Gazprom has been in talks for over a decade with China aboutselling it pipeline gas, but was unable to reach a deal due todifferences over pricing. Sources said that the deal could beclinched in May when Putin visits China.

Rosneft has said it want access to a yet-to-be-builtpipeline to China.

LNG PROBLEMS

Rosneft and ExxonMobil plan to build an LNG plant inRussia's Far East to produce 5 million tonnes per year of thefrozen gas starting from 2018. However, the project has beenhindered by infrastructure bottlenecks and uncertainty over gasreserves.

Last week, Putin approved expansion plans for an LNG plant,operated by Royal Dutch Shell and majority-owned byGazprom, on the Pacific island of Sakhalin.

Analysts have said that would hinder implementation ofRosneft and Exxon's LNG project.

Sechin told the meeting, presided over by Prime MinisterDmitry Medvedev, that both Gazprom, a monopoly owner of trunkpipelines, and Shell were denying his company access to apipeline from Sakhalin to the mainland for the LNG project.

"We believe those denials run counter to the law. We wouldask you to provide support over the access (to the pipeline),"Sechin said. (Reporting by Denis Dyomkin; writing Vladimir Soldatkin;editing by Nigel Stephenson)

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