Gazprom welcomes Shell back to Sakhalin

MOSCOW, June 29 (UPI) -- A partnership between Russian gas giant Gazprom and Royal Dutch Shell can continue in the challenging Sakhalin gas projects, the Russian prime minister said.

"We consider it possible to continue a partnership with Shell," Putin told representatives of the British energy giant.

Jeroen van der Veer, the chief executive at Royal Dutch Shell, for his part, welcomed the move nearly three years after Gazprom took control over the project from the supermajor.

"There are ideal conditions for that now from the economic viewpoint," he said. "Prices in construction are quite low, and the expenses will be lower correspondingly."

Russian regulators had pushed to close the Sakhalin gas facilities on environmental concerns, prompting Gazprom to seize control over developments there in 2006. Shell later sold its controlling shares in the Sakhalin-2 complex for $7.5 billion.

Neither company offered details on the fields planned for development or investment levels, the Moscow Times reports.

Dmitry Peskov, the spokesman for the Russian premier, dismissed claims the Russian energy monopoly was struggling in the current economic climate in its courting of foreign developers.

"Russia has always been open to foreign investors," he said.

Gazprom and Shell signed agreements on liquefied natural gas purchases from Sakhalin facilities in April following the first LNG shipments from Sakhalin-2 to Asian markets.