RusEnergy

09-26-2006 RBC NEWS - Gazprom's decision to re-direct gas to Europe reduces the chance for US companies to take part in the project
Up to half of gas produced at the Shtokman gas condensate field could be pumped to Germany by pipelines instead of being transported by tankers to the United States. Gazprom would decide on the issue shortly, Russian President Vladimir Putin said in Paris on Saturday. This reduces the chance for US companies to take part in Gazprom's large scale project.
Gazprom was considering the possibility of exporting Shtokman gas to Germany, Russian President Vladimir Putin told reporters after his meeting with French President Jacque Chirac and German Chancellor Angela Merkel on Saturday. "During her first visits to Russia some time ago, Ms. Merkel raised the possibility that some of the resources from the Shtokman gas field – one of the largest in north-eastern Russia - could be redirected to the European market. Gazprom is considering this possibility, and the decision could be passed very soon," he said.
Russia currently sells to Germany 55 billion cubic meters of gas a year, according to Putin. "From Shtokman alone, we will be able to send to Germany between 25 and 45 billion cubic meters of gas a year," Putin said. Gazprom's spokesman Sergei Kupriyanov did not tell RBC Daily how much gas his company planned to pump to Germany, but made it clear that Gazprom was seriously considering gas deliveries from Shtokman to Europe.
Experts link Gazprom's idea to an increase in Russian gas exports to Europe. "Gazprom's gas production is stagnating, and pumping Shtokman gas by pipeline could become an important element of new contracts with European partners," says Leonid Mirzoyan, an analyst at Dresdner Kleinwort Wasserstein.
The new project could also be seen as a sign of worsening relations between Russia and the United States. "It also reflects Gazprom's reluctance to orient the project solely towards the American market for liquefied natural gas," Mirzoyan noted.
This could reduce the chance for US companies to take part in the project, the analyst thinks. Gazprom's shortlist for the Shtokman project includes Norway's Hydro and Statoil, the US's Chevron and ConocoPhillips, and Total of France. Kupriyanov said he could not assess the chances of the US companies to become Gazprom's partners in the Shtokman project.
Meanwhile, a manager at one of two US firms shortlisted for the project, told RBC Daily that Gazprom was not yet in talks with the short-listed candidates. He said the project outlined by Putin was "just one of many possible options, and final conclusions could not be made before Gazprom announces its decision."
The Shtokman gas condensate field with reserves of 3.7 trillion cubic meters is located on the shelf of the Barents Sea. Gazprom's subsidiary Sevmorneftegaz holds a license for it. Igor Meshcherin, responsible for project analysis at Gazprom, said earlier that output could amount to 90 billion cubic meters a year. The project was estimated at between $12 billion and $14 billion.