RusEnergy

14.03.2005 15:12 MSK MosNews - Oil giant Shell has dismissed media reports that it has agreed to swap a seven percent stake in the Sakhalin-2 oil and gas project in Russia's Far East for the interest in Gazprom's vast Shtokman Arctic gas field. The report was published in the British Observer on Sunday, March 13. The report quoted unnamed sources as saying that Shell was "prepared to consider a modest dilution" of its 55 percent stake in Sakhalin-2, possibly by as much as seven percent, which in turn could cost it control of the project. Shell spokesman in Moscow said on Monday, March 14, that the firm was interested in gaining a holding in Shtokman, one of the world's biggest gas deposits, but was still in talks with various parties and had not come to any final agreement. "We would not comment on any numbers that are being speculated about. Our policy is not to comment on speculation," he said, quoted by Reuters. Russia's natural gas monopoly Gazprom has said it wants to find a partner by mid-2005 to exploit Shtokman, which contains 3.2 trillion cubic meters of gas and 31 million tons of condensate, and build a liquefied natural gas plant. Gazprom is inexperienced at dealing with LNG, which repays massive investment by solving the problem of how to move the fuel around. When supercooled and shipped at minus 269 degrees Fahrenheit (minus 162 Celsius), the gas can tap global demand. Gazprom wants to market its first Shtokman LNG by 2011, with the plant processing 15 million tons per year in the first stage of development of the field, which lies around 600 km (370 miles) off Russia's northeastern coastline. Potential partners in the project include Norsk Hydro, Statoil, ConocoPhillips, ChevronTexaco and ExxonMobil. Gazprom has also said it wants to be involved in Sakhalin-2, putting pressure on Shell and its partners, Mitsui and Mitsubishi of Japan, which have 25 percent and 20 percent respectively. The $10 billion project, Russia's biggest ever foreign investment, plans to load its first LNG cargo in November 2007 and has already sold the bulk of its annual 9.6 million tons of LNG to Pacific markets.