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Gazprom Pushing for Stake in Petro-Canada LNG Project in Quebec

The Globe and Mail is reporting that Petro-Canada is considering giving up a part of a Quebec LNG project in exchange for participation in a St. Petersburg project with Gazprom. During his press tour in the United States, Alexander Medvedev noted that Gazprom may prefer doing business with Canada, because they are less likely to raise any hackles with energy asset acquisitions, or be critical about the company’s close relationship with the Kremlin. globe.jpg Shawn McCarthy writes:

“I believe that ownership of infrastructure is a key to the market because we saw a lot of cases where absence of infrastructure access or ownership leads to a lot of risk or risk for energy security,” Mr. Medvedev said. “We, as the responsible supplier, would like not just to produce or to leave the product somewhere in the middle between the producer and the consumer but to be as close to possible to consumer to meet the needs of consumers.” The Russian executive acknowledged the company may face political opposition if it attempts to make major acquisitions of energy companies or assets in the United States. He noted two recent cases in which U.S. political opposition derailed foreign investments — Chinese National Offshore Oil Company’s attempted takeover of Unocal Corp., and Dubai Ports World’s effort to acquire management of U.S. ports. … Gazprom is widely considered in the West to be an arm of the Kremlin, with 50-per-cent-plus-one of its shares owned by the state and the government appointing the majority of its board. The company acquired major assets of bankrupted OAO Yukos in a controversial fire sale that was forced by the government when it jailed former Yukos chairman Mikhail Khodorkovsky. … “We are a commercially driven and value-driven enterprise, he said. “And all of the accusations that say we are manipulated by the Kremlin are absolutely absurd,” he said. The Gazprom executive said Canadian officials appear to be more welcoming than the Americans, and he would anticipate no problems with Russian investment in Canada. However, the Conservative government recently signalled a tougher review procedure for foreign state-controlled companies that want to make major acquisitions in Canada. Mr. Medvedev said Gazprom is looking to expand its reserve base beyond Russia ands become a full-fledged international energy company. He said the company has exploration programs in India, Vietnam, Algeria, Libya and Venezuela. “Why not the United States and Canada?” he said. On the Baltic LNG project, Gazprom is negotiating with a group of companies — including Petrocan — and will soon narrow down that slate to two or three companies with which it will form a consortium. Petrocan is counting on the Baltic project to supply the $500-million LNG terminal in Gros-Cacouna, Que., project that it is developing with its partner, TransCanada PipeLines Ltd.