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Wednesday, September 05, 2007

Total 'to book 300 Bcm of Shtokman gas'

29 August 2007 - Upstream OnLine - French giant Total will be able to book up to 300 billion cubic metres of gas reserves from the Shtokman development, according to Russian media reports. Moscow-based business daily Kommersant quoted unnamed industry sources as saying the figure represented 25% of reserves of Shtokman's first phase. The paper added that Total would have to pay cash compensation to development operator Gazprom for the opportunity to book reserves. The field holds reserves of 3.7 trillion cubic metres of gas, enough to supply the world for over a year, but only 1.22 Tcm is due to be produced in phase one. Gazprom's deal with Total has been 10 years in the making and became one of the biggest foreign deals for the Russian company as the partners prepare to invest over $15 billion in the first phase only over 25 years. Total will gain a 25% stake in a special purpose vehicle that will operate the field and own its infrastructure. Gazprom will retain outright ownership over Shtokman licence and control the field's production and all marketing rights, but Total has said it would be able to book some reserves from Shtokman. Pipeline supplies are due to come onstream in 2013, with liquefied natural gas production starting in 2014. Phase one of the project should produce 23.7 Bcm per year.

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