Rabaska signs letter of intent with Gazprom for LNG supply
May 15, 2008LEVIS, Que. - Enbridge Inc. (TSX:ENB) and Gaz Metro (TSX:GZM.UN) announced Thursday the signing of a letter of intent for Russian gas giant Gazprom to supply liquefied natural gas to the Rabaska terminal in eastern Quebec.
The U.S. subsidiary of Russian energy giant Gazprom hopes to become an equity partner in the proposed $840 million Rabaska project with the two Canadian companies and Gaz de France.
Gazprom would contract for all of the imported terminal's capacity and expects to import Russian LNG supplied from the Shtokman liquefaction project under development in 2014.
The parties expect to complete the agreements before the end of the year.
The Shtokman gas field discovered in 1988 is located in the Barents Sea, which is part of the Arctic Ocean north of Norway and Russia.
The Rabaska terminal is designed to store and re-gasify up to 500 million cubic feet per day of natural gas.
"The development of new markets and products is key to Gazprom's global energy strategy," stated Alexander Medvedev, deputy chairman of Gazprom.
"Delivering LNG produced at Shtokman to new Atlantic basin gas markets is keenly important to us, and Quebec and Ontario are attractive markets."
There are several LNG projects on the drawing board that would be required to bring natural gas from overseas fields to North America, which has been essentially self-sufficient in that commodity.
Rabaska has already obtained the key federal and provincial government approvals to proceed with construction of the terminal near Quebec City.
Gazprom is Russia's largest company and the world's biggest natural gas producer, with reserves of 29 trillion cubic metres.
