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Total rejects Shtokman development delayed for indefinite time

August 31, 2012, 15:43 UTC+3

Gazprom owns 51% of stock in the project, Total – 25%

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PARIS, August 31 (Itar-Tass) — The French petroleum company Total rejected some media reports on Friday that the development of the Shtokman gas field on the offshore shelf of the Barents Sea is delayed for an indefinite period of time. A source in the company noted that the partners are pondering over the ways for a higher economic efficiency of this project over the excessive growth of costs for its development.

“Total intended to note that the partners did not decide to postpone the Shtokman gas project for an indefinite period of time,” the corporation, which owns a share in the Shtokman Development company, said in a statement. “The partners came to conclusion that the expenditures for the projects are too high in the current situation. Therefore, the partners continue surveys at the level of experts to develop an economically viable project,” the statement runs.

The implementation of the first phase of the development of the Shtokman gas field is delayed for an indefinite period of time, because participants in this project came to an agreement that the expenditures for it are too high, member of the Gazprom board Vsevolod Cherepanov told Itar-Tass in Moscow on Wednesday. The investment solution was repeatedly delayed before over the disagreements between the participants over an economic model of the Shtokman gas development in liquefied gas production.

Gazprom owns 51% of stock in the project, Total – 25%. The Norwegian company Statoil was also participating initially in the project. However, Statoil has brought back formally a 24% stock of Shtokman Development over the expiry of the deadline of the shareholder agreement on the Shtokman gas project on June 30.

The Shtokman gas condensate deposit is situated in the central part of the shelf zone in the Russian sector of the Barents Sea. According to the explored gas reserves it is currently one of the largest in the world. Its geological reserves reached 3.9 trillion cubic metres of gas and about 56 million tonnes of gas condensate. The program for the development of the Shtokman gas field envisages the full cycle of development, from exploration to processing and transportation and is designed for three phases. The first phase of the development envisages the production of 23.7 billion cubic metres of natural gas annually.

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