Gazprom in LNG bunker agreement

World's leading gas producer signs MoU on the supply and storage of LNG bunker fuel in North Europe.

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Updated on 21 Sep 2012 11:19 GMT

Russian energy giant OAO Gazprom and port operator Summa Group have signed a memorandum of understanding (MoU) to study the possibility of supplying liquefied natural gas (LNG) as a bunker fuel to ships and building storage facilities in the North and Baltic Seas, Bloomberg reports.

In a joint statement, both companies said they would also consider expanding their cooperation in the Black and Mediterranean Seas and in the Pacific Ocean at a later stage.

Summa Group has investment interests in Russian ports and in Rotterdam. Together with OAO Transneft, Russia’s oil pipeline operator, it has joint control over a 50.1 percent stake in Novorossiysk Commercial Sea Port, PJSC (NCSP/NMTP Group), Russia’s largest port by volume.

Summa Group and VTTI B.V. are 75 percent and 25 percent shareholders of Shtandart TT B.V. - a company that plans to build and operate approximately 3 million cubic metres of storage facilities allocated for Urals crude oil and oil products in the port of Rotterdam. Construction work for the new terminal is expected to commence in 2013 with an operational start-up planned for 2015.

Gazprom has an involvement in the marine fuels industry via Gazprom Neft Marine Bunker LLC, which was established in 2007. The company was last year estimated to have an 18.5 percent share of the Russian bunker market with sales volumes of 2.2 million tonnes.

As the world's largest gas producer, Gazprom will be keen to promote the use of LNG to power ships as a greener and cheaper alternative to fuel oil. According to a recent forecast by Deutsche Bank AG, global demand for LNG will more than double by 2025.