OTC: Shtokman Phase 1 development tenders set for release

Guntis Moritis
OGJ Production Editor

HOUSTON, May 7 -- Shtokman Development AG plans to send out soon tenders for developing the giant Shtokman gas field in the Barents Sea, off Russia's north coast, said Philippe Rondy, Total SA's Shtokman planning manager. Speaking at a topical luncheon at the Offshore Technology Conference in Houston on May 6, Rondy said once the bids are returned by yearend, the company will have a better idea on project costs.

Rondy said the front-end engineering and design on the project that commenced in December 2007 will finish in November, with the company making an investment decision on Phase 1 at the beginning of 2010.

The field, which was discovered in 1988, has an estimated 135 tcf of recoverable gas and lies in 1,100 ft of water near the edge of the winter sea ice. To date, one exploration well and six appraisal wells have delineated the field.

The conceptional stage of Phase 1 has been completed, Rondy said. Phase 1 will involve the production of 2.4 bcfd of gas from three subsea templates with 20 producing wells. The gas will flow to a shipshaped disconnectable floating production unit before being transported in dual two-phase 36-in. pipelines to a planned 7.5 million tonne/year LNG plant at Teriberka in the Murmansk Region with another portion entering the North Stream pipeline from Teribeka to Vyborg and then to Germany.

Gazprom has announced that gas deliveries will commence in 2013 with LNG exports beginning in 2014.

Rondy said the large 1,200 ft long, 150 ft wide FPU will have topsides that weigh more than 40,000 tonnes.

He noted that subsurface and subsea development work is not expected to be problematic, but much of the project's difficulty relates to the short weather window for installation work and for the ongoing operations in arctic conditions that include sea ice (possibly every 3 years), 100-ft ice ridges, unpredictable ice drift, ice bergs, polar-low cyclone conditions, and –40° F. temperatures, Rondy said.

Partners in Shtokman Development are OAO Gazprom 51%, Total SA 25%, and StatoilHydro 25%. Twenty-five years after commissioning of the project, Gazprom will become 100% owner of the project, Rondy said.

Contact Guntis Moritis at guntism@ogjonline.com.

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