Is BP opening doors for Gazprom to the U.S. market?

24 Aug, 2007 04:40 / Updated 17 years ago

BP is reportedly offering to contribute part of its liquefied natural gas business in Trinidad and Tobago to its planned joint venture with Gazprom.

Gazprom, BP and TNK-BP agreed to set up a global venture earlier this year after TNK-BP was forced to sell its East-Siberian Kovykta gas field to Gazprom. The field will be Gazprom’s contribution to the future JV while BP's contribution has yet to be defined. The LNG plant in Trinidad that BP is reportedly offering now is a gateway for Gazprom to the U.S. market. The U.S. imports 18 BLN cubic metres of natural gas annually, mainly from Trinidad, Nigeria and Qatar, and analysts predict the country will face a significant gas shortage in the long term perspective. “The probable shortage will be due to Canada that will start producing oil from its oil sands using gas and it will reduce its supplies to the U.S. In addition there is the global tendency of switching to gas for cleaner energy in the electricity and transport sectors. This could also reduce supplies,” commented Aleksandr Orlov, head of research, Arbat Capital. Getting involved with LNG in Trinidad could bring Gazprom valuable experience but it is limited as a business model. Gazprom does not extract in the region and will have to buy gas from local producers. Alternatively it could ask BP to allow access to its fields in Trinidad.