TotalFinaElf eyes stake in Shtokmanovskoye gas field development

TotalFinaElf SA told Russia's Prime Minister Mikhail Kassianov, while he was on a visit to Paris, that it is ready to take a 25% stake in the development of the supergiant Shtokmanovskoye gas field.

By an OGJ correspondent

PARIS, July 16 -- TotalFinaElf SA told Russia's Prime Minister Mikhail Kassianov, while he was on a visit to Paris, that it is ready to take a 25% stake in the development of the supergiant Shtokmanovskoye gas field in arctic waters off northern Russia.

The massive field lies in 350 m of water in the Barents Sea 550 km off Murmansk, north of the Arctic Circle. Because of the region's heavy sea ice cover and remoteness, its development would be among the most technologically daunting and costly ever undertaken by the oil and gas industry.

Since 1996, TotalFinaElf has been interested in the field and formed an association with Russia's OAO Gazprom, Finland's Fortum Oy and Conoco Inc. to examine the feasibility of its development.

Although not indicating wishing to serve as operator of the development, TotalFinaElf has expressed a strong desire to be involved, a spokeswoman said. The company hopes an association will be formed by yearend for the purpose with the share of each partner determined. Russia is reportedly anxious to hold a 50% stake at least, possibly through Gazprom and OAO Rosneft, which have formed a joint venture for the exploration stage of the operation.

Reserves of the field, situated in an area where no development has ever taken place, are estimated at 3 trillion cu m of natural gas. First stage of the development—expected to require a $10 billion budget—would involve an offshore production platform, subsea pipelines leading to an onshore point not yet determined, and an onshore line to take the gas to the European market via St. Petersburg, which may include already existing segments. The gas would be shipped to Europe and Russia.

First gas of 22 billion cu m/year is expected in 2010. It is envisioned as the first part of four development stages involving a total ultimate outlay of $25 billion.

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