As per the terms of the deal, the JV will engage in the design, construction and operation of the LNG plant, enabling to take further steps in the implementation of the Baltic LNG project.
The companies have also signed the joint study framework agreement on the Baltic LNG project, which will help the firms to begin developing preliminary project documentation.
In June 2016, Gazprom and Shell signed a memorandum of understanding (MoU) on the Baltic LNG project. The document reflected the parties' intention to explore the prospects for cooperation within the project.
Baltic LNG is a natural gas liquefaction plant, which will be built in the Ust-Luga, Leningrad Region. With an annual capacity of around 10 million tons, the plant will mainly serve the European and Latin American markets.
In June 2013, Gazprom signed a MoU and cooperation agreement with Leningrad region for a LNG plant project.
Under the deal, the government of the Leningrad Region was expected to help Gazprom to secure all required approvals from the authorized regulatory bodies and local authorities.
Gazprom and Shell are also involved in the development of Sakhalin II project, which is said to include Russia's only active LNG plant.
The Sakhalin II operator is Sakhalin Energy Investment Company, which is owned by Gazprom with 50% plus one share. The other investors in the project include Shell with 27.5% minus one share, Mitsui with 12.5% stake, and Mitsubishi holding the remaining 10 %.
Image: Baltic LNG plant’s location. Photo: courtesy of Gazprom.
