Alaska Dispatch

By Tony Hopfinger

OAO Gazprom, the Russian state gas company, reared its head in Alaska on Monday while Governor Sarah Palin was away from the helm, busy on the trail in Virginia running for vice president.

Top officials from the natural-gas giant, including Chief Executive Alexei Miller and about a dozen board members, descended on Anchorage and met with Palin’s team charged with delivering the state a multibillion-dollar natural-gas pipeline (Palin calls the pipeline project “AGIA”, which one might imagine sounds like the name of a Russian car). Gazprom leaders also hooked up with ConocoPhillips Chief Executive Jim Mulva, who was also in Anchorage Monday. Conoco and partner BP Plc have a competing proposed pipeline project. (They call their pipeline “Denali”, as in the tallest mountain in North America, for those of you reading from the Lower 48.)

If you want to read what we reported for Bloomberg late Monday night, scroll down. Otherwise, read on to see how Palin factors into the Russian invasion.  

Both state and Conoco officials said the visit from Gazprom’s top brass touched on general energy opportunities in Alaska, with no specifics, but Gazprom’s leaders have said in recent months that they’d be interested in becoming part of the mega natural-gas pipeline project from the Alaskan Arctic to Alberta, Canada. (We must note that this project is far from a sure thing. Alaska’s leaders have been trying to land the pipeline for decades. Despite grand proclamations this year from both Palin and the two oil companies, the fabled pipeline may be no closer to becoming a reality than it was 20 years ago, especially given the sudden market meltdown and drop in oil prices. Who’s going to finance the $30 billion to $40 billion project?)

The Russian invasion comes about a month after presidential candidate John McCain suggested in an interview that Palin, in office less than two years, has gained foreign policy experience because, as he put it, “Alaska is right next to Russia. Sarah Palin understands that.” When Palin agreed to one of her rare media interviews since joining the McCain ticket, she told Katie Couric she knows a thing or two about Russia. “As Putin rears his head and comes into the air space of the United States of America, where do they go? It’s Alaska,” Palin said.

Unfortunately for Palin, she just missed a golden opportunity to prove her expertise in Alaska-Russia policy. Gazprom is a giant in the oil and gas industry – the largest company in Russia and, in fact, the third largest in the world. What former Alaska oilman (and now convicted felon) Bill Allen would call, “one of the big boys.” With the Russian government holding a majority stake, Gazprom is an aggressive player now spreading itself around the globe. Gazprom controls more than 90 percent of Russia’s gas and 17 percent of the world’s reserves.

If the state of Alaska is to ever have a relationship with Gazprom, it’s going to require a hardened, diplomatic leader. And if McCain loses the election, perhaps Palin will have a chance to prove she’s up to the task. Or maybe not. Read Hal Bernton’s Seattle Times article, “Are Russian ties a Palin priority?”

Below are the two Bloomberg stories I helped report late Monday night about the Gazprom delegation’s visit to Alaska:

Gazprom Woos Alaska Amid Chill in Relations With U.S. (Update1)

By Lucian Kim and Tony Hopfinger

Oct. 14 (Bloomberg) -- OAO Gazprom offered to help Alaska develop its natural resources, as Russia’s largest energy producer seeks to expand into the U.S. amid the worst chill in relations since the Cold War.

State-run Gazprom sent eight senior executives to Anchorage for talks yesterday with Alaska’s Department of Natural Resources and ConocoPhillips Chief Executive Officer Jim Mulva, state and company officials said.

Gazprom, which already supplies a quarter of Europe’s natural gas, is seeking to increase its reach with projects around the world, including in North America. The courtship of Alaska comes three weeks before the U.S. presidential election, in which Russia’s resurgence has become a campaign issue.

``The timing is as interesting as the visit itself,” said Chris Weafer, chief strategist at UralSib Financial Corp. in Moscow.

Sarah Palin, governor of Alaska and Republican candidate for vice president, has criticized Prime Minister Vladimir Putin for ``rearing his head” over Russia’s sea border with her home state. Relations between the countries hit a low after Russia routed U.S. ally Georgia in a five-day war in August.

``Gazprom’s entire senior management goes into Sarah Palin’s backyard during a contentious election,” Weafer said. ``There’s a message there.”

Gazprom Delegation

Gazprom Chief Executive Officer Alexei Miller was accompanied by deputies Valery Golubev, who served alongside Putin in the Soviet-era KGB, and Alexander Medvedev, who oversees Russia’s gas exports. A working breakfast was held with Palin supporter and former Alaska Governor and Nixon appointee Wally Hickel, according to Gazprom. (Read past Dispatch coverage of Hickel, his gas pipeline, and his up and down relationship with Palin.)

Gazprom, which earlier this year booked capacity at a planned Canadian liquefied-natural gas plant, wants to break into the U.S. market as well.

The Moscow-based company looked at LNG projects along the U.S. East Coast before holding talks with Exxon Mobil Corp. on its BlueOcean terminal. And it considered Conoco and Chevron Corp. as potential partners in its Shtokman development in the Arctic Ocean before picking France’s Total SA and Norway’s StatoilHydro ASA instead.

Miller said in June that Gazprom had approached Conoco and BP Plc on joining their Denali pipeline project, designed to deliver Alaskan gas to the continental U.S. At the same time Gazprom expressed interest in a rival pipeline project backed by Canada’s TransCanada Corp.

Alaskan Projects

``The working conditions in Gazprom’s traditional areas of production practically coincide with those in Alaska,” the Russian company said. ``Gazprom’s experience will be in demand when similar projects are developed in Alaska.”

Gazprom didn’t specifically discuss pipeline projects during the meeting with Alaskan officials, Marty Rutherford, deputy commissioner of the state’s Department of Natural Resources, said by phone. ``They were talking very generically. They would love to partner with us and other firms,” she said.

Talks with Houston-based Conoco focused on ``broad-based business opportunities,” ConocoPhillips spokesman Charlie Rowton said. ConocoPhillips, the third-largest U.S. oil company, owns 20 percent of OAO Lukoil, Russia’s biggest independent oil producer.

To contact the reporters on this story: Lucian Kim in Moscow at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; Tony Hopfinger in Anchorage at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Gazprom, ConocoPhillips Discuss Alaska Opportunities

By Tony Hopfinger and Stephen Bierman

Oct. 14 (Bloomberg) -- Alexei Miller, chief executive officer of OAO Gazprom, Russia's natural-gas exporter, met with Alaskan and ConocoPhillips officials to discuss business opportunities in the most northerly U.S. state.

Miller and other Gazprom executives expressed "general interest" in working in Alaska, Marty Rutherford, deputy commissioner of the state's Department of Natural Resources, said by phone in Anchorage Monday.

Miller said in June at the St. Petersburg Economic Forum that Gazprom approached ConocoPhillips and BP Plc on joining their Denali pipeline project, aimed at delivering Alaskan natural gas to the continental U.S. Gazprom at the same time expressed interest in a rival project backed by TransCanada Corp., to transport Alaskan natural gas to Alberta.

The Gazprom executives also met with ConocoPhillips CEO Jim Mulva, ConocoPhillips spokesman Charlie Rowton said by e-mail. "The focus of today's conversation was not Denali, the Alaska Gas Pipeline, but other broad-based business opportunities," Rowton said.

Gazprom did not specifically discuss pipeline projects during the meeting with Alaskan officials, Rutherford said. ``They were talking very generically. They would love to partner with us and other firms, and they have a lot of advanced scientific technology,'' Rutherford said.

BP Alaska spokesman Steve Rinehart said he would ``neither confirm nor deny'' if his company is meeting with Gazprom's delegation in Alaska.

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