Petro-Canada and Gazprom have signed an agreement to proceed with initial engineering design to build a Baltic gas liquefaction plant near St. Petersburg, Russia. The preliminary engineering studies will provide cost and schedule estimates from which the two companies may proceed into detailed design engineering for the liquefaction plant.

Liquefied natural gas (LNG) supply from the Baltic plant would be shipped to Petro-Canada's LNG regasification facility in Gros-Cacouna, Quebec that, subject to regulatory approvals, Petro-Canada intends to build with its partner TransCanada Corporation. Gas from this terminal would be targeted for the Quebec and Ontario markets.

The successful conclusion of today's discussions means that Petro-Canada is one step closer to entering the North American LNG market.

"LNG is going to be a big part of the future of the gas market in North America. As this project moves forward, we will be in an excellent position to import long-term gas supply, not only from Russia but from other parts of the world as well. We see this agreement as an important part of our overall growth strategy," said Ron Brenneman, Petro-Canada's President and Chief Executive Officer.

Petro-Canada is one of Canada's largest oil and gas companies, operating in both the upstream and the downstream sectors of the industry in Canada and internationally. We create value by responsibly developing energy resources and providing world class petroleum products and services. Our common shares trade on the Toronto Stock Exchange under the symbol PCA and on the New York Stock Exchange under the symbol PCZ.