Russian gas monopoly Gazprom has chosen Total as its main partner to develop the Shtokman giant Arctic offshore natural gas field. Total will control a quarter of the company to finance, build and own the field’s infrastructure. ConocoPhillips, Chevron, Statoil, and Norsk Hydro have been rejected for the moment but could join the project at a later stage. Gazprom said that eventually it would keep at least a controlling 51% interest in it and other partners could get 24%.
Shtokman – discovered in 1988 – has massive reserves, enough to meet North America’s total needs for five years. But the challenges of getting it to customers are equally huge. The gas is over 500 kilometres offshore under the Barents Sea, in very harsh environmental conditions including million tonne icebergs, 25-metre high waves, six months of darkness and freezing winds.
The involvement of foreign firms should speed up the field’s development as they can contribute technology and expertise and share the cost, as much as 22 billion euros. The deal was announced one day after French President Nicolas Sarkozy and Russia’s Vladimir Putin spoke on the phone about energy cooperation and other issues. Production is due to be split between pipeline exports to Europe and liquefied gas taken out on tankers.