labels: industry - general, oil & gas, economy - general
India, Russia to extend co-operation in energy sectornews
31 October 2006

Mumbai: India and Russia have agreed extend their co-operation in the energy sector and work together in refinery downstream projects in both the countries.

While India is participating in the production-sharing agreement in Russia's far eastern island of Sakhalin, wants to acquire more oil assets there, it is ready to open up downstream sector for the Russian companies in return.

This would add a new dimensions in their energy cooperation, including participation of Russian oil majors in expanding the refining and delivery capacities of Indian Oil Corp (IOC).

Petroleum minister Murli Deora, who is on a two-day visit to Russia, indicated this in Russia. Deora is attending the 'Moscow Energy Dialogue' under the 'international energy week'.

Deora who met with Russian industry and energy minister Viktor Khristenko, said the IOC had invited Russian companies to participate in its 15-million tonne Paradeep refinery project.

"Indian Oil Corporation is planning the expansion of its refining and delivery capacity by 30 million tonnes annually and we have invited the Russian oil majors to participate in downstream projects, including product pipelines," the minister said.

He, however, did not divulge further details saying it was a matter to be decided by the companies through direct negotiations.

India has proposed an exploration venture with Russian gas major Gazprom and sought a stake in the Sakhalin-III oil and gas project in the Far East. Deora has suggested a 49:51 joint venture between India's Oil and Natural Gas Company (ONGC) and Russia's Gazprom, the world's largest natural gas producer.

He said the ONGC-Gazprom combine could undertake joint exploration for oil and gas in India, Russia and other countries. The joint venture could also work on gas liquefaction projects in Russian offshore fields for shipments to India, he said.

Deora also has offered Russian firms a stake in Indian Oil Corp's proposed $4-billion Paradip refinery and petrochem project in Orissa.

"We would like a stake in Sakhalin-3," Deora said. ONGC Videsh Ltd, the overseas arm of ONGC, already has 20 per cent stake in Sakhalin-I project, which will pump 12 million tonnes of crude oil in 2007.

India will take the first consignment of crude from Sakhalin-1 in the first week of December. India plans to almost double its annual import of crude oil to about 200 million tonnes a year of which 50 million is expected to come from Russia.

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India, Russia to extend co-operation in energy sector