February 1, 2010
Advanced Search



Forgot your password?
Register now

Home / News / Today's Headlines / Gazprom May Divert Shtokman LNG Away From U.S., Delay Project


Gazprom May Divert Shtokman LNG Away From U.S., Delay Project

OAO Gazprom, the Russian energy company seeking to break into the U.S., may have to divert planned shipments of liquefied natural gas from its Shtokman project away from the country to get higher prices elsewhere.

Directors at Shtokman Development AG, which operates the Arctic project, will meet Feb. 5 to agree on a new gas-marketing plan for the offshore field, said Vladimir Dimitrov, chief technologist at Gazprom’s subsea division. They may also delay a final investment decision on the venture, he said.

“Everybody is waiting for this board meeting,” Dimitrov said in an interview in Tromsoe, Norway. The project may be pushed back and future gas supplies diverted to other markets, he said. Shtokman partner Total SA said in December that the directors would make an investment decision by the end of 2010 instead of in March, which was already a delay from 2009.

Gazprom, the world’s largest gas producer, together with partners Statoil ASA and Total, had planned to send as much as 90 percent of Shtokman’s LNG to North America. The project faces competition from rising shale-gas production in the U.S., which has already prompted suppliers such as BG Group Plc to divert cargoes to other markets where prices for the fuel are higher.

Shtokman directors may agree on new deadlines for pumping the first pipeline gas and producing the first LNG, Dimitrov said. He declined to estimate project development costs.

“The cost of gas production in the Arctic is high and we can’t make a mistake,” he said. “We will be evaluating all possible optimal options” for selling the fuel.

Total said in October that Shtokman had been delayed by two years and output wouldn’t start before the end of 2015.

Copyright 2009. Bloomberg. All rights reserved. 


Related news

Copyright © 2008 Eurasia Press, Inc. (USA). All rights reserved.
Web programming by Iflexion
Copyright © 2008 Eurasia Press (www.eurasiapress.com)