RUSSIA is selecting contractors to develop the challenging Shtokman gas field in the Barents Sea, Shtokman Development AG Deputy Executive Director Herve Madeo said.
The Swiss-registered company was established in February 2008 to develop the deposit, estimated to contain 3.8 trillion cubic metres of natural gas and more than 37 million tonnes of gas condensate. Gazprom has a 51% equity interest in Shtokman Development AG where StatoilHydro (24%) and Total (25%) are the two other partners.
In the first phase of the field’s development, Shtokman Development is selecting contractors supplying and manufacturing equipment and technology to produce natural gas at depths exceeding 1,000 feet, the construction of a 373-mile natural gas pipeline from the gas field to the coast and contractors to build a liquefied natural gas plant in Teriberka port, Madeo was quoted by the press as saying.
According to Murmansk region Governor Dmitry Dmitriyenko, Shtokman Development AG is seeking foreign contractors for the work because Russian companies lack the expertise. During a news conference Dmitriyenko told reporters, “Russia’s experience in building pipeline systems at such large depths is very limited. Most likely, Russian contractors will not be involved in those works since we do not have the required technology.”
Russia is seeking to beef up its presence in the global market for LNG to a 20% share with the help of Yamal and Shtokman. Gazprom’s Chief Executive Alexei Miller said he expects the global market for LNG will double by 2020. Gazprom operates Russia’s only LNG project - Sakhalin II - located on the Pacific island of Sakhalin. Shell was forced by Russian authorities to cede control of the project in 2007 - a move that rattled many investors. But two weeks ago, Russian Prime Minister Vladimir Putin’s called for Western companies to help Russia develop its gas reserves in the Yamal peninsula. The peninsula in northern Russia and surrounding area is said officially to hold some 70 percent of Russia’s total known gas reserves.
Asked if Russia’s Yamal initiative may, if pursued, impact negatively on Sh­t­okman’s prospects, Konstantin Simonov, director of the independent National Energy Security Fund in Moscow, told New Europe on 1 October that Gazprom is developing Shtokman jointly with two foreign partners – StatoilHydro and Total. “Shtokman is not a Russian problem. Shtokman is the problem of Total and the problem of StatoilHydro. And the same situation is with Yamal peninsula,” he said. He noted that the Russian government has reconsidered its earlier decision to develop Yamal’s strategic reserves on its own and is seeking foreign help. “Putin made this presentation of the Yamal project and soon it will be possible to speak about joint ventures between Gazprom and other foreign companies,” he said. “For Russia it would be difficult to develop both projects. But now Shtokman is not a Russian project. It’s our joint project and the same can be with Yamal.”
Transporting gas from the Yamal peninsula is very uncertain. There is no final decision because several years ago the official plan was to build the Bovanenkovo-Ukhta pipeline system and transfer gas from the Bovanenkovo field and all other fields to Ukhta, Simonov said, adding that currently there are more active discussions about possible LNG exports from Yamal to the United States. However, Gazprom is still considering building the Bovanenkovo-Ukhta pipeline, which can connect with existing pipelines in Ukraine and Belarus, he said. He also said that he sees no need to use Nord Stream to export gas from Bovanenkovo to Europe. “I don’t think that Yamal and Shtokman will struggle for a place in Nord Stream,” he said, adding that the majority of produced natural gas from Shtokman’s first phase would be sold to Europe via Nord Stream.