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. Last Updated: 07/27/2016

French to Swap LNG for Russian Gas

LONDON -- Gazprom has agreed to swap gas it supplies Europe by pipelines for liquefied natural gas from Gaz de France, then deliver the LNG to Shell Western LNG in the United States.

Gazprom will buy the LNG from Gaz de France's joint venture with Algeria's Sonatrach, the Russian gas producer said Wednesday. The cargo will be delivered next month to Cove Point, Maryland.

Gazprom delivered its first LNG to the United States, buying the fuel in August from BG Group, a British gas producer. Gazprom plans to build up business in the United States, the world's largest energy consumer, where so far it sells almost no gas.

"Strengthening Gazprom's position in the traditional natural gas market in Europe, at the same time we are entering the global gas market, by using the model of swapping pipe gas for LNG," Alexander Medvedev, a Gazprom deputy chief executive, said in the statement.

That is the first swap agreement with Gaz de France.

Gazprom aims to have 10 percent of France's natural gas market by 2010, the French newspaper La Tribune said on Nov. 16, citing Stanislav Tsygankov, head of Gazprom's department for foreign affairs.

Gazprom supplied 10.9 billion cubic meters of gas to France in the first 10 months of the year, the company said Tuesday. Since 1975, France has received more than 250 billion cubic meters of gas from Russia and, before 1991, the Soviet Union.

Gazprom is considering offers from Chevron and Total, among other companies, to develop a $10 billion offshore Arctic field and ship LNG to North America. Demand for gas is rising as consumers switch to cleaner fuels.

Gazprom has been in talks with companies operating in North Africa and Europe, including BP, to provide gas supplied to Europe by pipelines in exchange for LNG in the United States. The swaps could cover 3 bcm to 5 bcm of gas in 2005, the company said last September.

Gazprom plans to swap LNG with its partners from 2006 to 2009 and sell Russian-made LNG under long-term contracts beyond 2010.

BP chief executive John Browne and Gazprom chief executive Alexei Miller met Tuesday in Moscow to discuss cooperation in the European gas market, LNG sales and construction of an LNG plant near St. Petersburg, the Russian company said.