Russia’s Gazprom took further steps to strengthen its hold on natural gas supplies to Europe on Thursday, signing a joint venture with Libya and saying it was in preliminary talks on a multibillion dollar project to pipe Nigerian gas to Europe across the Sahara.
News of the two projects came as Vladimir Putin, Russian president, became the first Russian leader since 1985 to visit Libya. According to the country’s official news agency, Libyan leader Muammer Gaddafi said during talks with Mr Putin he supported the idea of forming an Opec-style group of gas-exporting countries.
Industry experts say the idea of a gas exporters’ cartel – which has now been backed by several producers – remains a distant prospect. But Thursday’s events showed the extent to which Russia, the world’s biggest gas producer, is building ties with other large gas exporters and increasingly playing a co-ordinating role.
Among a string of commercial deals sealed during Mr Putin’s visit, Gazprom agreed to set up a joint venture with the National Oil Corporation of Libya to explore for, produce, transport and sell oil and gas.
The agreement came two weeks after Gazprom and Italy’s Eni said after talks in Moscow they had agreed to work together in “third countries”, later identified by industry officials as Libya – seen as one of the north African oil and gas producers with most potential.
Eni, the leading foreign operator in Libya, recently agreed to double capacity with an 8bn cubic metres a year pipeline carrying its gas across the Mediterranean to Italy.
Alexei Miller, the Gazprom chief executive who accompanied Mr Putin to Tripoli, reiterated on Thursday that the Russian monopoly was interested in taking part in construction of the second stretch of the pipeline linking Libya and Sicily.
Mr Putin flew from Libya on Thursday night to Sardinia for a meeting with Silvio Berlusconi, newly re-elected prime minister of Italy, which is emerging as one of Russia’s most important business partners, particularly in energy.
Meanwhile, Mr Miller said Gazprom was holding talks with Nigeria about participating in a $13bn (€8bn, £6.6bn) project to build a pipeline 4,000km across the Sahara linking the Niger Delta to an export terminal on Algeria’s Mediterranean coast.
Mr Putin’s visit to Libya highlighted Russia’s determination to strengthen its influence in north Africa and aggressively to pursue deals around the globe for the large, often state-owned, corporations that have emerged during his presidency.
The Russian president agreed to write off $4.5bn of debt from Libya in return for a multibillion dollar contract with Russian companies. “I am satisfied by the way we have solved the debt problem,” Mr Putin said. “I am convinced we found a scheme which will benefit both the Russian and Libyan economies and…people.”
Much of the debt was accrued from Soviet-era arms sales to Libya, when the country was a big buyer of Soviet weapons.
While little information was released Thursday on arms deals, defence officials had been quoted by Russian media before Mr Putin’s visit as saying agreements were in prospect to sell arms to Tripoli valued at up to $3bn.
Some of that was said to relate to new equipment, including anti-aircraft systems, jet fighters, helicopters and submarines, and some to modernisation of Soviet-era weaponry.
The largest single deal announced on Thursday was a €2.2bn ($3.48bn, £1.77bn) contract for the Russian railways monopoly to build a 554km line between the cities of Sirte and Benghazi.