OMV, Gazprom Discuss Black Sea LNG
Gazprom and OMV signed documents June 2 at the St. Petersburg International Economic Forum (Spief) to further develop their strategic partnership, including one on a small-scale liquefaction unit in the Black Sea.
They signed a memorandum of understanding, outlining the principles of a potential cooperation between Gazprom and OMV in coordinating activities for the development of the gas transmission infrastructure required for providing natural gas supplies to central and southeastern Europe.
Also they signed a framework agreement to collaborate in the small-scale LNG sector, whereby both "intend to cooperate in a joint integrated project for a small-scale LNG production terminal on the Russian Black Sea coast" and in transporting, marketing and selling its output.
Apart from Russia itself, Turkey, Ukraine and Romania are the largest gas markets in the Black Sea region. Ukraine however halted Russian gas purchases some two years ago, while Romania is self-sufficient now and may become a net gas exporter in the 2020s with OMV planning to develop one of Romania's offshore fields.
Gazprom may have an eye on the region's bunkering market. However any attempt to transport LNG through the international Bosphorus strait, and past the mega-city of Istanbul, may be opposed by the Turkish government as in the past.
Both CEOs met June 1, during which Gazprom noted that Russian gas supplies to Austria increased by 79.5% year on year in January-May 2017, following a 38% year on year increase to 6.1bn m3 in supplies during calendar 2016. Both men also stressed the strategic importance of the Nord Stream 2 gas pipeline project, led by Gazprom and backed by OMV, in addressing growing demand for Russian gas in Austria and other countries. Gazprom said that Russian gas sales to Hungary increased by 37.3% in January-May 2017, noting they had been 5.7bn m3 in calendar 2016.
Mark Smedley