No Need to Speed up Shtokman Development?

September 16, 2009

There is no need to speed up development of Shtokman gas field at the moment. Such an opinion was expressed on Tuesday at the international conference RAO / CIS Offshore-2009 in St. Petersburg by Alexey Kontorovich, the Chairman of Scientific Council of Academy of Sciences on geology and oil and gas field development. “There is no need to begin development of Shtokman gas field too soon,” he said, noting that continental deposits are sufficient for Russia’s current commitments in gas supplies.

According to A. Kontorovich,”a project is now being designed, but in a custom development to implement the project in 1-3 years is not possible.” “When the economy requires, any problem has a solution," he concluded.

The Shtokman field is located in the central part of Russia's sector of the Barents Sea. As of January 2006, reserves of Shtokman's classified as C1 + C2 type, approved by the state commission on stocks, amount to 3.8 trillion cubic meters of gas. To implement the project in the first phase, Gazprom (51%), France's Total (25%) and Norway's StatoilHydro (24%) formed in February a joint venture Shtokman Development AG registered in Switzerland.

The implementing of the first phase of the project began in July 2007. It involves production of 23.7 bln. c.m of natural gas per year, 50% of which is planned to be delivered by pipeline, the other 50% will be directed for the production of liquefied natural gas (LNG). Output of LNG in the first phase could reach 7.5 mln t per year, with possible 15 mln tonnes in the second phase and up to 30 mln tonnes in the third. It is expected that the natural gas will be supplied to Europe and the countries around the Atlantic, including the United States. Pipeline deliveries are scheduled for 2013, LNG – in 2014. According to the preliminary data, the volume of investment in Shtokman is estimated at $ 15 billion. Feasibility of the project and preparation of initial engineering design (stage FEED) are to be completed by the end of 2009. Investment decision phase on Shtokman has been moved from 2009 to I quarter of 2010.

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