Fluxys, Gazprom Ink Small-Scale LNG Deal

Belgian gas transmission system operator Fluxys and Russian gas giant Gazprom have signed a framework agreement to collaborate on small-scale LNG projects in Europe. 

The two companies said in a joint statement on March 29 that the deal, which was signed in Paris, signalled an intent to cooperate on joint projects for the construction and operation of LNG receiving terminals, LNG filling stations and LNG bunkering infrastructure in Europe.

Vice-Chairman of the Board of Gazprom Alexander Medvedev and CEO of Fluxys Pascal De Buck were the signatories for the framework agreement. 

"Developing the required small-scale LNG infrastructure is key to put the EU sustainable alternative fuels strategy into practice," De Buck said. "It will enable small-scale LNG to further unlock its vast potential to mitigate the environmental and health impact of shipping, long-haulage transport by truck and remote industrial sites not connected into a pipe gas network."

Though the companies did not indicate any specific projects that might arise from the agreement, Medvedev said that the agreement was important to Gazprom's diversification.

"By developing this segment, Gazprom will further diversify its export potential and increase its supply of sustainable energy to Europe," he said. 

This is not the first deal of its kind that Gazprom has signed within the past year. In July 2015, the Russian major also signed an agreement with the Netherlands' Gasunie to cooperate on small-scale LNG. So far, no new joint venture LNG projects between Gazprom and Gasunie have been announced. 

However, Gazprom has made recent progress on other LNG projects. Earlier this month, on March 2, the company announced that its Gazprom Export subsidiary, Gazprom Germania, had carried out its first bunkering of a ship with LNG at the port of Rostock, Germany, having previously signed a memorandum of understanding (MoU) with Rostock Port in 2014. The bunkering was the first time a ship was fuelled with LNG in the southern Baltic Sea, Gazprom said. Its proposed Baltic LNG project is also intended to include bunkering facilities.

Erica Mills