Gazprom: Shtokman project on indefinite hold

Gazprom has further darkened hope for the ambitious development of Shtokman gas-condensate field in the Barents Sea by turning a 3-year delay into an indefinite postponement (OGJ Online, Feb. 8, 2010).

Shtokman Development AG, a partnership of the Russian company, Total, and Statoil, had cited “changes in the market situation and particularly in the LNG market” when it announced a delay in the deepwater arctic project in 2010.

In the new move, Vsevolod Cherepanov, head of Gazprom’s production department, said the partners had concluded that “financing is too high to be able to do it for the time being.”

The Shtokman project involved subsea completions and a floating production vessel in more than 1,000 ft of water near the edge of winter sea ice, two dual-phase pipelines to Murmansk, and onshore gas treatment and liquefaction plants. The field is estimated to hold 3.9 trillion cu m of natural gas in place.

The project’s capital structure and strategy have taken several swerves. Gazprom initially sought bids from potential foreign partners but in 2006 said it would develop the field alone and target LNG sales in Europe (OGJ Online, Oct. 10, 2006). It later said it saw Shtokman LNG as a way to enter the US market and eventually reopened the project to international partners (OGJ, Dec. 7, 2010).

Later, a surge in supplies of natural gas in North America from unconventional resources slashed the US need for LNG and increased competition in the European LNG market.

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