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. Last Updated: 07/27/2016

Petro-Canada Urges LNG Plant Approval

Canadian oil and gas firm Petro-Canada on Tuesday urged potential partner Gazprom to approve a plan to build a $3.5 billion liquefied natural gas plant on the Baltic Sea to capitalize on the decline of the product's supply in North America.

Petro-Canada, one of several foreign companies that Gazprom has shortlisted as a possible partner in the project, is seeking from 25 percent to 49 percent of a joint venture to build and operate the plant.

North America provides for more than 90 percent of its natural gas needs, but the fields -- mostly found in Canada -- "are getting tougher" and production began to decline this year, Petro-Canada's vice president Graham Lyon told a gas industry conference.

The Baltic plant would produce 5 million tons of LNG annually and start deliveries in 2013 if Gazprom makes the decision this year, Lyon said. North America is expected to consume 80 million tons of LNG by 2015, he said.

Gazprom is set to consider the plan next month, the gas producer's deputy chief executive Alexander Medvedev said on the sidelines of the conference.

"I believe the project has all the necessary parameters for a positive decision to be made." Medvedev said.

Gazprom is also planning to build an LNG plant near Murmansk to start shipping the gas from the giant Shtokman field in the Arctic to Atlantic markets in 2014. Gazprom has not yet identified the plant's capacity.

"Skeptics say that Shtokman can do the same job in the same timeframe, but in fact there is no competition," Lyon said. "There is plenty of room for both projects."

Petro-Canada hopes to sign a 20-year contract to buy some of the gas from Gazprom to ship it to a re-gasification terminal with capacity for 3.6 million tons, which the company is planning to build in Quebec, Lyon said.