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ONGC has displayed interest in another project in Russia
India's Oil & Natural Gas Corporation (ONGC) has displayed interest in another project in Russia. The company is ready to invest more than $6 billion in the Kovykta gas deposit, Gazeta writes. New Delhi gave the company the green light to buy a stake in Yuganskneftegaz, a former Yukos production unit, in early 2005. The Indian side was ready to spend up to $2 billion on a 15% stake in Yuganskneftegaz. ONGC later promised to provide Rosneft with a $4 billion loan. TNK-BP, the main shareholder of RUSIA Petroleum (which has the right to develop the Kovykta gas deposit), was surprised to learn about ONGC's plans. RUSIA Petroleum has experienced no financial problems while developing this deposit. Accordingly, Maria Radina, an analyst with the Finam investment company, believes it will not see ONGC as an attractive financial partner. Initially, RUSIA Petroleum wanted to pump Kovykta gas to China and South Korea, meaning a pipeline would have to be built. However, Gazprom believes that it should export all Eastern Siberian gas. One new idea is that Kovykta gas should be used for the expanding Irkutsk-region gas infrastructure. India possibly wants to take advantage of the uncertainty over Kovykta gas supplies to acquire the resources. Indian experts believe that a Russian-Indian gas pipeline will cost $6.5 billion. ONGC is ready to invest the same amount in Kovykta. However, Russian analysts do not believe this is enough and put the gas pipeline's cost at nearly $10 billion. Leo Snykov, an analyst with Sovlink, believes that a Russian-Chinese gas pipeline should be built with a branch heading to India. In that case, ONGC would have to strike a deal with Beijing. Mr. Snykov says the Indian company's participation in the Kovykta project should hardly be examined in the context of gas deliveries. This most likely highlights India's attempt to gain a foothold in this new Russian project
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