Miller Held Talks on Libyan Pipe To Europe

LONDON — Gazprom chief executive Alexei Miller and Libya's top oil official discussed the construction of a pipeline across the Mediterranean to pump Libyan gas to Europe.

"We had a discussion, a question, about our participation in the biggest pipeline from Libya to Europe," Miller said via the phone of Shokri Ghanem, Libya's top oil official, after the two held talks Wednesday.

The undersea pipeline could also involve Italian energy major Eni, media reports have said.

Gazprom and Eni formed a strategic partnership in 2006, which allowed for energy asset swaps, including those that Eni has in Libya. The two companies have previously said the deal also involved pipelines.

Libya exports around 8 billion cubic meters of gas per year to southern Sicily via the Greenstream pipeline, which is owned fifty-fifty by Eni and Libya's National Oil Corporation.

Miller did not give details on the volumes or timing of the potential second pipeline.

Both Ghanem and Gazprom, which supplies Europe with one-quarter of its gas needs, agreed at the talks that Libya would sell some of its oil and gas to Russia.

"Gazprom wants to discuss in the future possibilities of buying Libya's gas," said Miller, who also met with Libyan leader Muammar Gaddafi on his visit to the country.

Ghanem said Wednesday that Gazprom had offered to buy any additional gas produced by Libya, as well as some of its oil. He said it did not mean that Gazprom would buy all of the country's oil.

Earlier on Wednesday, Gazprom said in a statement after Miller met with Gaddafi that the company hoped to buy "all future volumes" of gas, oil and liquefied natural gas available for export — at market prices.

Libya and Gazprom also agreed on a refining joint venture, which would involve both modernizing existing refineries and creating new ones.

"We see that we have a big potential in our cooperation [with Libya] in upstream and downstream in gas and oil," Miller said.

Libya's gas reserves are estimated at 1.47 trillion cubic meters, though NOC said they could be more than twice that figure.

Gazprom's interest in Libya was further cemented in April, when it signed a memorandum of cooperation with NOC.

The agreement prompted fears that the two major European gas suppliers could work together in a similar way to the Organization of the Petroleum Exporting Countries.

Gazprom's latest bid to strengthen its grip on gas supplies around Europe comes as no surprise, said David Cox, the president of PЪyry Energy Consulting.

"It fits with their strategy of, if not forming a gas OPEC by discussion, then doing it by just cornering all the resources," he said.

"Hydrocarbons is where they want to be and having as much of it as possible. And the amount of money they must have sloshing around in their coffers."

Cox said it was unlikely that Libya would want to commit to selling its oil to one buyer and would most likely stick to selling its crude on the open market.