Rabaska, Gazprom: Letter Of Indemnity For LNG Supply

Russian energy giant Gazprom plans to enhance its North American presence by partnering with Canadian pipeline companies Enbridge Inc. and Gaz Metro to supply the proposed Rabaska LNG terminal near Quebec City.

Gazprom's U.S. subsidiary signed a letter of intent Thursday to become an equity partner in the proposed $840 million Rabaska liquefied natural gas project with the two Canadian companies and Gaz de France.

Gazprom would contract to supply all of the import terminal's capacity and expects to import Russian LNG supplied from the Shtokman liquefaction project under development in 2014.

Financial terms of the deal, expected to be completed this year, were not disclosed..
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.

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.

Russian LNG will supply the key Canadian markets in Quebec and eastern Ontario.
Rabaska has already obtained the key federal and provincial government approvals to proceed with construction of the terminal at Levis, Que., across the St. Lawrence River from Quebec City, beginning in 2010.

Gaz Metro chief executive Sophie Brochu said the partnership with Gazprom confirms the viability and competitive strengths of the project.

Brochu said the demand for natural gas is so strong in Quebec and Ontario that she predicted that between 2012 and 2014 it will be "the equivalent of another Rabaska."