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Shell Is Negotiating With Indian Consortium To Divest Its Stake In Russian LNG Plant: Reports

Shell Is Negotiating With Indian Consortium To Divest Its Stake In Russian LNG Plant: Reports
According to reports citing sources, Shell is in talks with a group of Indian energy companies to sell its part in a major liquefied natural gas plant in Russia that the British giant abandoned following Moscow's invasion of Ukraine.
The consortium's possible interest in the Russian facility demonstrates India's willingness to invest in energy assets and inexpensive oil supplies that have become available as a result of Western firms' withdrawal from Russia.
Shell announced in February that it was exiting all of its Russian activities, including its 27.5 per cent investment in the Sakhalin-2 LNG plant on Russia's eastern frontier, amid a Western exodus.
Following its decision to leave Russia, the world's largest liquefied natural gas trader wrote down $3.9 billion in Russian assets.
According to the sources, the corporation has lately initiated talks with a group of Indian companies, including ONGC Videsh and Gail, to buy the interest.
Shell is also seeking separate offers from the Indian group for long-term LNG cargo and crude oil supply agreements with Sakhalin 2, according to two sources.
There were no comments in the reports from Shell, ONGC, Gail and other state-run Indian companies.
According to reports, the Indian government has ordered state-owned energy corporations to assess the feasibility of buying Russian assets from European oil majors such as BP (BP.L).
It was uncertain whether the talks between Shell and the Indian consortium would result in a sale, whose value is unknown following Shell's writedown on its Russian holdings.
According to the sources, any sale agreement would need to be approved by Moscow.
According to one of the individuals, Shell is not in talks with other firms, particularly Chinese energy conglomerates, about selling its Sakhalin-2 interest.
Gazprom, a Russian gas firm, owns and operates Sakhalin-2. Mitsui & Co. of Japan and Mitsubishi Corp. of Japan are also involved in the project.
Shell agreed to sell its Russian retail and lubricants assets to Lukoil earlier this month.

Christopher J. Mitchell

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