Russia buys control of LNG site for $7.45b
MOSCOW -- Russia's state-controlled natural gas monopoly wrested control of the country's largest single foreign investment from Shell yesterday, taking a majority stake in the Sakhalin-2 project for $7.45 billion in a deal that consolidates the Kremlin's command over national energy resources.
The agreement, made public at a Kremlin meeting between President Vladimir Putin, executives from OAO Gazprom and Royal Dutch Shell PLC, and top executives from Japanese shareholders, comes after months of mounting pressure from Russian regulators.
Gazprom will pay cash for a 50 percent-plus-one share in the $22 billion development on the Pacific island of Sakhalin, and Shell, Mitsui & Co., and Mitsubishi Corp. will halve their stakes.
That puts Gazprom in the driver's seat of Russia's first liquefied natural gas development, which is poised to be a key supplier to growing markets in Asia and North America.
Shell said it would retain a 27.5 percent stake and "continue to significantly contribute to the [consortium's] management and remain as technical adviser." 