New life of Shtokman

The head of Gazprom, Alexey Miller, held a meeting yesterday on the development of the giant Shtokman field on the shelf of the Barents Sea. It was decided to make Sevmorneftegaz (the subsidiary of the concern that owns the license) the single customer for design and construction. The new scheme for implementing the project, as well as the role of potential foreign partners, as reported in the concern's press release, will be determined in the spring of 2007. Since the concept of the project was radically revised back and the tender for the exchange of assets with foreign companies was cancelled, Gazprom has remained silent about the future of Shtokman. Now the concern has to figure out how to attract foreign companies to the development of a very complex field without sharing reserves with them. As you know, in October the Gazprom board decided to maintain 100% control over Shtokman's assets instead of selling 49% of the reserves to foreigners in exchange for other assets and development assistance.

The Shtokman field has approved reserves of 3.7 trillion cubic meters and allows the production of about 80 billion cubic meters of gas per year. In September 2006, Gazprom named five foreign companies (Norwegian Statoil and Hydro, American Chevron and ConocoPhillips, and French Total) , from which it planned to select two or three to form a consortium for the production, production of 3.6 million tons of liquefied gas and its implementation in North America. The concern announced that the selection criterion was the provision of equal assets in the sales market and in the field of production in third countries. However, after numerous delays, Alexey Miller announced that the proposed assets did not suit Gazprom and the plan to create a consortium was canceled. Moreover, the priority, instead of the Shtokman LNG project, which was supposed to be the first phase of development of the field, is the export of gas through the second string of the Nord Stream pipeline (gas from the Yuzhno-Russkoye field will go through the first string).

Foreign applicants were invited to consider participating in the project as contractors. Only Total publicly refused. Norwegian partners, on the contrary, are showing interest in participating in the development of hydrocarbons in the Barents Sea in any form. However, no one will share unique technologies just for money, so the main task of Sevmorneftegaz is to find a mutually beneficial form of cooperation by spring.

There are also some purely organizational restrictions. Gazprom has already made an investment decision to commission the giant Bovanenkovskoye field in Yamal by the end of 2011. It is planned to receive gas from Shtokman in the fall of 2013, when the second string of the pipeline along the bottom of the Baltic will be put into operation. And it will be very difficult to implement two extremely complex and risky mining projects at the same time. At least, Gazprom has not been able to do this for a long time.

Alexey GRIVACHS