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Gazprom Plans to Pay for Sakhalin Stake by April

Russia's Gazprom.jpg

OAO Gazprom, Russia's natural-gas export monopoly, will pay Royal Dutch Shell Plc and two Japanese companies $7.45 billion in cash by April for half of the Sakhalin-2 oil and gas project off Russia's east coast, Deputy Chief Executive Officer Alexander Medvedev said.

The payments will be made by the end of the first quarter, Medvedev told a conference call with investors today. The cost of righting environmental damage "were considered and included in our payment when we entered the Sakhalin project,'' Medvedev said.

Shell, Mitsui Co. and Mitsubishi Corp. all agreed to sell half their stakes in Sakhalin-2 to Gazprom on Dec. 21, giving the state-run company a controlling stake in the venture.

The Hague-based Shell and its partners have invested $12 billion in Sakhalin-2, Russia's first liquefied natural gas project. Shell's stake will fall to 27.5 percent, with Mitsui retaining 12.5 percent and Mitsubishi 10 percent.

© Bloomberg

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