The United States has signed an agreement with Russia to buy $2 billion in liquefied natural gas (LNG) storage, and the agreement is likely to accelerate the deployment of natural gas storage in the United States, as the United Kingdom has done, according to officials.
The agreement was announced by Secretary of Energy Steven Chu and Russian energy minister Dmitry Rogozin on Wednesday in a phone call, according a U.S. official familiar with the matter.
The deal is likely not final, but the officials said the two sides have agreed to “work together toward a final agreement” as early as next month, according the official.
A key point of contention has been whether Russia will sell the liquefactors or buy them.
Russia is not required to sell its liquefractured natural gas exports to the United Nations.
The U.N. Security Council is expected to vote on a resolution that would authorize Russian to sell LNG to the U.K. under a temporary, four-year deal that expires next month.
The deal with Russia, which includes an agreement to use natural gas to produce electricity, will require an additional $1.8 billion to be paid by Russia, according U.C. Davis.
The total purchase, including an additional contract, could be as much as $3.8 bn, the officials added.
Russia, which is already in the midst of its own liquefactions program, announced last month that it was acquiring liquefactor RSCO, a joint venture between Gazprom and Russian state gas giant Gazprombank, to expand its liquifactions capacity.
It also signed an initial contract with a company based in Britain, according an official familiar in the matter who spoke on condition of anonymity because the matter was private.
Russia, the official said, would also have a “long-term” liquefactory agreement with the United Arab Emirates, another U.A.E. market.
“These are the key issues in the overall Russian energy market and it is very important that they are not overshadowed by the U,S.
energy market,” said Stephen Pribilio, president of the Energy Research Center at Carnegie Mellon University, who said he was not involved in the decision.
“The Russians are not only investing in the future, they are also investing in their own energy security and their own national security.”
A spokesman for Russia’s energy ministry did not immediately respond to a request for comment.
The government does not publicly release economic statistics on energy deals with the world’s largest economies.
The two sides are also expected to negotiate a bilateral agreement to export LNG, which was first announced in February, and an international deal for LNG export from the United states.
The United States signed an export agreement with Saudi Arabia last month and plans to export liquefined natural gas from the country.
The export agreement, the source said, “is intended to accelerate and expand the deployment in the U