OAO Gazprom’s Unexpected Dow(ry)?

Via Todd Sullivan’s Value Plays, an interesting review of a recent MOU signed between Russian natural gas monopoly OAO Gazprom and Dow Chemical outlining potential cooperation on refining gas from Russia’s Yamalo-Nemets autonomous district and the possibility of creating a joint venture based on Dow’s new petrochemical facilities in Germany.  While I am not sure I sustain the same level of excitement as Mr. Sullivan regarding Dow as a stock, he does note some interesting possibilities:

“…In late October Gazprom announced an agreement with Statoilhydro (over) the Shtokman gas and condensate field located in the central part of the Russian sector of the Barents Sea offshore.

Approved by the RF Nature Ministry’s State Commission for Mineral Resources in January 2006, Shtokman’s C1+C2 reserves make up 3.7 tcm of gas and over 31 mln t of gas condensate.

In October 2006, the Gazprom Management Committee decided that pipeline gas deliveries from the Shtokman field to the European market would take priority over LNG shipments. Shtokman was identified as the resource base for Russian gas export to Europe via the Nord Stream Gas pipeline.

Phase 1 stipulates production of 23.7 bcm of natural gas per annum, gas and LNG supplies via the gas pipeline will start in 2013 and 2014, respectively.”

…The potential JV would give Gazprom access to new petrochemical facilities set up by Dow in Germany. In return Dow would refine gas at Gazprom’s fields in the Yamalo-Nemets region in the north of Russia. Essentially Dow would have the inside track in building the Russian petrochemical industry. This follows similar deals for Dow in both Saudi Arabia and China.”



This entry was posted on Thursday, November 29th, 2007 at 1:52 pm and is filed under Gazprom, Russia.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.