RusEnergy

04 April 2007 - Upstream onLine - Russian gas monopoly Gazprom has narrowed the list of potential partners in the giant Shtokman gas development after US supermajor Chevron apparently "lost interest" in the project, a Gazprom source said today. The source told Reuters Gazprom was still talking to France's Total, US supermajor ConocoPhillips and Norwegian players Statoil and Norsk Hydro on setting up a joint operating company for Shtokman. The operating company would own production and transportation facilities, with at leasst 51% of the outfit remaining in Gazprom's control. The Russian giant will also be the sole owner of gas produced, but foreign partners could in theory book reserves of Shtokman as shareholders of the operator, the source said. "As they (foreign partners) will be involved in production and all technological aspects, they will be able to book reserves if they manage to get it confirmed with the (the US Securities & Exchange Commission)," he added. The comment follows a meeting between Gazprom's boss Alexei Miller and Total's Christophe de Margerie to discuss Total's role in Shtokman. Miller has had similar meetings with ConocoPhillips' chief executive James Mulva. Last year Gazprom stunned all five companies by scrapping a year-long bidding process and saying it would develop Shtokman without any foreign equity partners. Analysts interpreted the move as a Kremlin response to US criticism of Moscow's energy policies. Many energy-rich countries are seeking to tighten their grip over resources amid record prices for oil and gas. Some industry analysts said Gazprom would struggle to complete the $20 billion project, under the stormy and iceberg-strewn Barents Sea, without foreign know-how. After ditching the shortlist, Gazprom said it would use foreign contractors but would not offer them any equity in the project, which envisages piping some Shtokman gas to Europe and liquefying the rest for shipping to the US. Shtokman, located 550 kilometres off the coast of Norway and Russia, has reserves of more than 3.7 trillion cubic metres of gas - enough to meet global consumption for over a year. Discovered in the 1980s, the field was meant to be put on stream in 2003, but the start up is now not expected before 2013-2015.