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Gazprom poised to rely on Linde after Shell left LNG project: sources

April 12, 2019
Chemical Value Chain

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Russian gas giant Gazprom is poised to rely on industrial gases group Linde as a technology supplier for its major liquefied natural gas (LNG) project after Royal Dutch Shell left it, sources close to the project said.

On Wednesday, Shell, the Anglo-Dutch major which has a long history of energy cooperation with Russia, said it had decided to leave the Baltic LNG project on the Russian Baltic coast which it had been discussing with Gazprom for several years.

Its decision left open a question about the availability of technology for the project which Shell had been expected to provide.

Linde has the technology which can potentially be used for the Baltic project, it said in its presentation at an industry conference in Germany in January. Shell made a presentation of its own technology at the same conference.

Both presentations were made when Gazprom and Shell were still working on the Baltic project together and were choosing between the two technologies, a source close to Gazprom said.

“The choice is clear now because Shell has left the project and declined to provide its technology,” the source said.

Linde’s technology is the only option available for the project, the source added.

Linde and Gazprom declined to comment.

Russia, which plans to substantially increase its share of the global LNG market, has to rely on foreign know-how to freeze sea-borne gas to temperatures below minus 160 degrees Celsius as it has no such technology.

One of the world’s biggest oil producers, Russia has been under Western sanctions since 2014 due to its annexation of Crimea from Ukraine.

Liquefaction technologies have been unaffected by the sanctions. The production of seaborne LNG is also not directly affected by the sanctions, but the sale and marketing of it, as well as foreign participation, have become more complicated due to the restrictions.

Industry leader Linde has recently been created from a merger between German Linde AG and its former U.S. rival Praxair. The merged group is legally based in Ireland and has its headquarters in the United States.

“The technology will be from Linde for certain,” said another source, close to the project.

By Olesya Astakhova, Vladimir Soldatkin

Source: Reuters

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