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Shell, Gazprom say no agreement reached yet on Sakhalin-2

Royal Dutch Shell PLC and Gazprom are continuing discussions over the 20 bln usd Russian gas project Sakhalin-2 and declined to predict how soon an agreement can be achieved, according to spokespeople at both companies.

Gazprom chairman Alexey Miller and Shell chief executive Jeroen van der Veer met again last Friday in Moscow, fuelling speculation the companies are nearing a deal and an agreement will be announced before Christmas.

'We had constructive discussions last Friday. The dialogue is still ongoing and the content (of those discussions) remains confidential,' said a Shell spokeswoman in London.

Shell is widely expected to hand over 30 pct of the project to Gazprom, with Japanese partners Mitsui & Co Ltd and Mitsubishi Corp ceding 10 pct each.

If this is true, Gazprom will get 50 pct of Sakhalin-2, with Shell's stake cut to 25 pct. Mitsui and Mitsubishi will end up with reduced 15 pct and 10 pct, respectively.

A Gazprom spokeswoman in Moscow told AFX News that talks over the Russian gas group's entry in Sakhalin-2 are 'progressing.'

'There are different options (on how Gazprom will proceed with the plan) and no final decision has been reached yet,' she added.

Gazprom is currently holding a regular board meeting, though the spokeswoman pointed out that Sakhalin-2 was not on the agenda, which included the group's internal market operations, pricing policy and executive remuneration scheme.

Van der Veer will be in Moscow towards the end of the week to meet with Russian energy minister Viktor Khristenko regarding Sakhalin-2, sources said.

Shell, according to the Russian press, has reportedly agreed on the share transfer in exchange for cash and an alliance with Gazprom on future projects.

Gazprom was previously reported to have offered 2.4 bln usd for the Shell stake, way below analysts' valuation for the shares of at least 6 bln usd.

Both companies declined to comment on the reports.

© AFX

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