By OGJ editors
HOUSTON, June 4 -- Russia's OAO Gazprom has invited Norsk Hydro AS to join the partnership that will develop giant Shtokman gas field in the Russian area of the Barents Sea. Reportedly one of the largest gas fields in the world, Shtokman lies in the Arctic about 500 km from Murmansk.
Norsk Hydro would bring to the partnership 30 years' expertise in developing properties on the Norwegian continental shelf and transporting natural gas from offshore fields, including technological expertise gained during its Ormen Lange field development, "which we hope to transfer and expand in the development of Shtokman together with Gazprom," commented Eivind Reiten, Norsk Hydro's president and CEO. "There is potential here for reducing the cost estimate for the development by 30%," he added.
However the partnership is far from finalized, Reiten cautioned: ". . . there are a number of questions that need to be clarified, such as the progress plan for the development, ownership stakes, and other conditions," he said.
Russia plans to develop Shtokman with an LNG terminal at Murmansk and export the LNG to the US. (OGJ, Aug. 25, 2003, p. 100). The project has been on hold since 1992 because of financial, legal, and technical problems associated with development in such a hostile environment.
However, with estimated reserves of 3.3 trillion cu m, Shtokman has attracted the attention of five other major oil and gas companies as well as Norsk Hydro: Gazprom subsidiary Rosshelf, OAO Rosneft, ConocoPhillips, Total SA, and Fortum Oy. The field's development is a costly $40 billion enterprise, with its first phase pegged at $15-20 billion. One understanding was for the Russian partners to put up half the investment and the four foreign companies the other half (OGJ, Mar. 10, 2003, p. 20).
