Russian gas giant Gazprom and international major Shell have signed Heads of Agreement (HoA) to set up a joint venture for the development of the Baltic LNG project in Ust-Luga, on the Russian coast of the Baltic Sea. The Baltic LNG project would be a 10 Mt/year gas liquefaction project, which should be commissioned in 2023. It could be later expanded to 20 Mt/year.
In June 2016, the two companies had signed a Memorandum of Understanding (MoU), under the terms of which the companies would cooperate on LNG and would explore options to build the LNG terminal by the end of 2021. Shell could take 49% of the project.
Shell and Gazprom are already involved in the 9.6 Mt/year Sakhaline II LNG export plant in the Russian Far East which should accommodate a third LNG train rated 5 Mt/year. Gazprom owns 50% plus one share in the project, in partnership with Shell (27.5% minus one share), Mitsui (12.5%) and Mitsubishi (10%).
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