The cost to develop a large gas field in Soviet waters of the Barents Sea may be about $5 billion, says a member of a group of companies preparing to conduct a feasibility study.
Survey work indicates that the Shtockmanovskoye field area contains reserves of about 106 tcf of natural gas, says Neste Oy of Finland.
Reserves of that size would make the field smaller than the largest known western Siberian natural gas fields.
The field is in about 984 ft of water in the mostly ice free western portion of the Barents, about 250 miles northeast of Murmansk.
A five company group signed a letter of intent late last year to conduct a development feasibility study of the field during 1990 for the Soviet Oil and Gas Industry Ministry (OGJ, Oct. 30, 1989, Newsletter).
An agreement in principle provides for "extensions of activity," but whether other fields have been discovered in the area or whether the agreement refers to future fields is unclear.
A final agreement is expected to be signed within weeks, with work to start shortly thereafter.
Companies in the group are Norsk Hydro AS of Norway, Du Pont Services BY of Holland, and Neste, Imatran Voima, and Wartsila of Finland.
PROJECT EFFECTS
The companies plan to split the work among teams based in Murmansk, Helsinki, and Oslo.
Norsk Hydro will supervise the offshore elements of the feasibility study, most of which will be carried out in Norway.
Formation of a production joint venture could follow if results are positive, Neste said.
Assuming that the project gets under way in the first half of the 1990s, gas production could start before the end of the decade.
The Kola Peninsula and the Leningrad region of the U.S.S.R. are likely to be potential users of Shtockmanovskoye gas.
Increased gas consumption would help reduce air pollution in the Kola Peninsula in particular.
Northern Finland, Sweden, and western Europe are seen as potential gas export markets.
The Kola area is rich in iron ore, nickel, phosphate, and mica. Burning coal to generate electrical power for mining causes emissions that drift over Finland and Norway.
The Finns hope gas will prevent pollution from planned mining projects and reduce emissions from existing operations.
Neste said its own involvement in the project would give it access to an alternative source of gas, complementing fields farther east at which current supplies originate.
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