Shell Sees Russia LNG Sales To US In 2007

A Shell-led joint venture that is developing oil and gas resources off Russia's Sakhalin Island, said it expects to sell Russian liquefied natural gas to the U.S. from 2007. Steve McVeigh, chief executive of the Shell-led Sakhalin Energy Investment Co., said the joint venture has agreed to sell 2.8 million tons per year, for 20 years, of LNG to Japanese customers and that he expects further sales deals into Asia.

"While negotiations are ongoing and indeed advanced with other buyers, we do not limit our vision to Asia," McVeigh told delegates at an industry conference.

"It is realistic to expect Sakhalin Energy will be supplying Russian LNG to North America in 2007 when we expect to make our first LNG shipments," he added.

McVeigh told reporters that announcements of further LNG sales into Japan or Korea may come early next year. He also said an announcement for LNG sales to the West Coast of North America "could happen next year."

McVeigh said Sakhalin Energy was talking to a number of companies about receiving the LNG on the West Coast, including project leader Shell, which has plans for a receiving terminal at Baja, California.