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UPDATE 1-Shell commited to Russia expansion despite sanctions

Fri, 18th Apr 2014 13:25

* Shell CEO commits to Russia at meeting with Putin

* Says to boost LNG production

* Energy minister says no signs of reduced investment

* Says South Stream pipeline to proceed (Adds detail, quotes)

By Alexei Anishchuk

NOVO-OGARYOVO, Russia, April 18 (Reuters) - Royal DutchShell is committed to expansion in Russia, ChiefExecutive Ben van Beurden told Russian President Vladimir Putinat a meeting on Friday amid sanctions imposed on the countryafter its annexation of Ukraine's Crimea region.

Shell plans to expand Russia's only liquefied natural gas(LNG) plant with Russian partner Gazprom, he said at ameeting at Putin's residence.

"We, of course, will pledge all the necessary administrativeguidance and support," Putin said in response in a meeting thatwas later broadcast on national television.

The United States and European Union have imposed targetedsanctions against a list of Russian and Ukrainian individualsand firms in retaliation for Moscow's annexation of Crimea lastmonth.

EU and U.S. diplomats have indicated that they may considerwider sanctions against whole sectors of the Russian economy ifRussian forces were to enter Ukraine.

"We are very keen to grow our position in the RussianFederation," van Beurden said. "We look forward withanticipation and confidence on a very long-term future here inRussia."

BP boss Bob Dudley said this week the sanctions had notimpacted the company's business in Russia.

LNG EXPANSION

Shell already has an oil-producing project with Gazprom Neft, Gazprom's oil arm, and they have started to taphard-to-recover oil in Russia.

Van Beurden confirmed that Shell had agreed with Gazprom toexpand the Sakhalin-2 LNG plant which produces 10 million tonnesof LNG per year.

Other shareholders include Japan's Mitsui andMitsubishi.

The expansion plan is in line with Putin's demand to boostproduction of LNG and double Russia's global market share toaround 10 percent by 2020.

Earlier on Friday, Russian Energy Minister Alexander Novaksaid there was no sign of international oil and gas majorscutting investment.

The world's top crude oil producer and a leader in naturalgas, Russia has signed deals with international majors includingExxonMobil, Eni, Statoil and BP,mainly relating to projects in the Arctic.

Novak also said the 2,400-kilometre (1,490-mile) SouthStream pipeline from Russia via the Black Sea to southernEurope, avoiding Ukraine, would proceed despite signs that theEuropean Union may withdraw its support.

(Reporting by Alexei Anishchuk and Anastasia Lyrchikova;Writing by Vladimir Soldatkin and Conor Humphries; editing byJason Neely)

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