BP HAS agreed to supply cargoes of liquefied natural gas (LNG) to Gazprom for onward sale to America in a move that signals the Russian gas giant’s growing determination to build a new business in marketing the frozen fuel.
The initial cargo was loaded in Trinidad from Atlantic LNG, a leading gas producer operated by BP. The vessel is chartered to deliver the fuel to a terminal at Cove Point, Maryland, and the agreement is believed to cover four to five cargoes, delivered to American ports.
The curious deal, struck in recent meetings between Lord Browne of Madingley, BP’s chief executive, and Alexei Miller, Gazprom’s chairman, reflects the Russian company’s desire to build up a business relationship with American gas buyers. At the same time, BP needs to develop closer ties with Gazprom, with which it has struggled to find common ground.
Years of negotiations with Gazprom have so far failed to unlock the British company’s prize Russian asset, a massive gasfield in Eastern Siberia. Plans by BP to sell the fuel to China have been stymied by BP’s need to secure Gazprom’s co-operation.
“This agreement is a clear indication of the way our two companies can work together to their mutual advantage,” BP said.
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Gazprom is keen to move into LNG, a business that is growing at twice the rate of global demand for energy, but it lacks expertise. The Russian company hopes to develop Shtokman, a huge gasfield in the Barents Sea, for LNG exports to the United States.