REUTERS SUMMIT-Gazprom weighs 4th production train for Sahkalin-2 LNG plant

* For other news from Reuters Russia Investment Summit, click on http://www.reuters.com/summit/Russia15 (Updates with more quotes, context)

By Denis Pinchuk

YUZHNO-SAKHALINSK, Russia, Sept 29 (Reuters) - Russian energy giant Gazprom is considering building a fourth production train for its Sakhalin-2 LNG plant, a joint venture with Royal Dutch Shell (Xetra: R6C1.DE - news) , Alexander Medvedev, the company's deputy CEO, said in an interview on Tuesday.

Gazprom and Shell (LSE: RDSB.L - news) signed a memorandum of strategic partnership earlier this year, agreeing to commission a third production train for the Sakhalin plant aimed at expanding its capacity to 15 million tonnes from 10 million tonnes.

A fourth train would mean that the plant in Russia's far east -- the country's only LNG-producing unit -- would double its current capacity.

"From a technical point of view everything (that is needed for the fourth production train) is there," said Medvedev, who was speaking during an interview conducted as part of the Reuters Russia Investment Summit.

"The key point to discuss is the gas sourcing issue", he said, explaining that Gazprom was in the process of choosing whether to buy gas from Rosneft-ExxonMobile's nearby joint offshore field, Sakhalin-1, or to get it from Gazprom's own Yuzhno-Kirinskoye deposit, which is on a U.S (Other OTC: UBGXF - news) . sanctions list.

Separately, Rosneft and Exxon have been considering launching their own LNG project on Sakhalin to liquefy reserves from Sakhalin-1. However, Rosneft said this month the plant had been delayed until after 2020.

"If we succeed in buying gas from Sakhalin-1 this solves the resource base issue not just for the two current production trains but for the third and fourth trains," Medvedev said.

CHINESE PROSPECTS

Medvedev shrugged off the impact of U.S. and EU sanctions imposed over Russia's actions in Ukraine which, combined with low oil prices, have hurt the economy.

Such economic pain would not deter investment, he said, saying Gazprom was still ready to invest in new LNG projects, including in Sakhalin-2 and Baltic LNG, even though oil prices were languishing at $45-$50 per barrel.

"Even (Taiwan OTC: 6436.TWO - news) if this period will last for several years it won't affect our readiness to invest", he said. Latin America, the Middle East, and South East Asia were potentially interesting markets, he added, singling out the Philippines in particular.

Medvedev also cited China, saying he was confident of its prospects even though its economy was under strain.

"Of course, (Chinese) domestic demand will probably not reach the kind of figures that have been mentioned such as 500 bcm per year or more," he said. "But 400 bcm per year and then some is definitely realistic even if economic growth is low."

Russia announced this month it would construct its third gas pipeline to China from Sakhalin. It (Other OTC: ITGL - news) has another pipeline under construction and another at the design stage.

Medvedev said he saw Yuzhno-Kirinskoye and Kirinskoye as a source base not just for the expansion of Gazprom's LNG plant, but for the pipeline to China from Sakhalin as well.

EU ANTI-TRUST ENQUIRY

Gazprom on Monday said it had filed a reply to EU regulators, who have accused it of abusing its dominant position in eastern Europe.

Medvedev said on Tuesday that proposal addressed "how to remove the EU's concerns in respect not just to the past, but to the future as well". He declined to elaborate.

Gazprom, which supplies around a third of Europe's needs, expects the EU's demand for gas to grow this year and next due to a drop in European production, he said.

"We have overtaken our gas flows (to the EU) last year by around 100 million or even more cubic meters per day. This year's exports (except CIS (LSE: 0J6U.L - news) countries) will be considerably higher then 2014, nearly 160 bcm (from 146 bcm in 2014)."

Earlier this month, Gazprom sold 1.2 billion cubic metres (bcm) of gas via its first spot tender, to be delivered via the Nord Stream undersea gas pipeline from Russia to Germany.

Medvedev said Gazprom would conduct more tenders with "new delivery points, new volumes and a new timetable." He did not say where and when.

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