REUTERS
Day two of the annual International Economic Forum in St Petersburg.
It’s where top Russian government officials rub shoulders with industry leaders and foreign investors.
But this year there was a distinct lack of Americans, and fewer europeans – preferring not to be seen doing business with the Russians.
One Western firm not shy – Shell.
It’s done a deal with Gazprom which will see the pair form a global strategic alliance, according to Gazprom’s CEO.
The deal is something of a coup for the Russian gas giant.
Winning over Shell when many Western companies are keeping their distance because of Western sanctions over Moscow’s actions in Ukraine.
Gazprom could now get access to Shell’s projects in other countries.
Still some fear it could be bad for business.
CARSTEN BRZESKI, CHIEF ECONOMIST ING GERMANY:
“If you get two strong powers move towards a monopoly situation this is not good for market. We’ve seen that regulators are watching very closely that we do have good competition, that there are liberal markets, open markets, and that we don’t have too many monopolies.”
The pair are already planning to expand the Sakhalin LNG plant, Russia’s sole LNG plant.
And further plans to build two new Nord Stream pipelines under the Baltic with Shell, E.ON and OMV.
They’ll provide for more than a tenth of Europe’s gas demand by the end of 2019.
Russia has been fighting for market share in Europe.
An alliance with Shell, if approved by regulators, could move it a step closer.