Gazprom Looks to Hike Output at Sakhalin-2

LONDON -- Gazprom said Monday that it was examining plans to increase gas extraction from the Sakhalin-2 fields, being developed with Royal Dutch Shell in the country's Far East.

The company is also seeking to market the government's share of liquefied natural gas from Sakhalin-2, Gazprom deputy chief executive Alexander Medvedev said. He reiterated that the first LNG cargo might be shipped "early next year" and that the project would start pumping oil year-round, shifting away from seasonal output.

Gazprom last year bought control of Sakhalin Energy Investment, the venture operator, as it tightened its grip over the country's largest foreign investment project. Sakhalin-2 had originally planned to export its first LNG cargo in the second half of 2008.

"The analysis of the project development shows that some pipeline gas may" be produced from the Sakhalin-2 project, Medvedev said in a phone interview from Algeria.

Also Monday, Sakhalin Energy secured a $5.3 billion loan from Japan Bank for International Cooperation and other banks to develop the LNG project. Gazprom Shell, Mitsui and Mitsubishi are investing $22 billion in the project.

n Gazprom said Monday that it had dropped plans to produce liquefied natural gas on the Yamal Peninsula, an Arctic region it is planning to develop with Royal Dutch Shell, Reuters reported.