(EnergyAsia, June 24 2013, Monday) — Russian energy major Rosneft has become a liquefied natural gas (LNG) supplier by securing its first long-term contracts last Friday with Switzerland’s Vitol and Japan’s Sakhalin Oil and Gas Development Co Ltd (Sodeco) and Marubeni.
In breaking Gazprom’s monopoly over the country’s LNG trade, Russia’s largest crude oil producer committed to an annual supply of 2.75 million tonnes to Vitol, 1.25 million tonnes to Marubeni and one million tonnes to Sodeco, all starting 2019.
The agreements were signed during last week’s St Petersburg International Economic Forum in the presence of Russian President Vladimir Putin. They coincided with the Russian government’s decision to allow Rosneft and ExxonMobil to jointly build and operate an export-oriented 10-million tonne/year LNG plant near Sakhalin Island in the Far East from 2018.
Vitol’s head of trading for Russia and the CIS Jeffrey Martz, Sodeco’s President Yoshiaki Umemura and Marubeni’s regional CEO for Europe & CIS Motoo Uchiyama signed on behalf of their companies, while Rosneft was represented by its president and chairman, Igor Sechin.
With the agreements, Mr Sechin said Rosneft has secured guaranteed sales of significant LNG volumes from the proposed plant.
Ian Taylor, Vitol’s President and CEO, said the landmark deal will diversify and strengthen its LNG supply line and expand “the possibilities of serving our clients in the Asia-Pacific region.”
The deal with Sodeco builds on its existing partnership with Rosneft in developing oil and gas reserves off Sakhalin Island. US major ExxonMobil, the operator, and Sodeco each own a 30% stake in the Sakhalin-1 project while Rosneft and India’s ONGC each have a 20% share.
Rosneft said the LNG agreement with Sodeco gives it access to “the strategically important Japanese natural gas market, the largest in the Asia-Pacific region.”