Alexei Miller's French kiss
Gazprom has announced his foreign Shtockman partner. Covered with waters of the Barents Sea, Shtockman liquefied natural gas field can become a key source of energy for the whole Europe and North America. French Total will be Gazprom’s partner in its development and get a 25 percent stake in an operating company that will be created to plan, finance and build the first stage of the project. Total won’t receive any right of disposing of the gas; Gazprom will keep not only a controlling stake in the company (at least 51 percent) but also will own 100 percent of the company that holds the actual license to the field.
Shtockman is situated 550 km from the Kola peninsula, it is estimated to contain over 3.7 trillion cubic meters of gas - enough to meet world demand for more than a year. The development, including building of a liquefied natural gas plant, the first one of such capacity in Russia, will cost about $30 billion. Gazprom considers Shtockman to be a base for exporting of Russian gas in Europe (through the Nord Stream gas pipeline) and building of a liquefied natural gas plant.
Gazprom CEO Alexei Miller said that one or several foreign partners could get a further 24 percent stake in the future. As well as Total, Gazprom has been in talks with US ConocoPhillips, Norwegian Statoil and Norsk Hydro. Till recently the American company was considered to be a favorite but since the relations between the two countries became worse, the US company lost.
In the beginning of 2006 Alexei Miller announced, that foreign companies would be hired only as contractors, so they would have no direct exposure to revenues or ability to book a part of the field's reserves. But it was clear that Gazprom would not be able to develop the field itself, without foreign help, since it demanded not only great financial expenditure but involving new technologies and specialists of well qualified specialists.
So, Gazprom had to abate the position. In the beginning of February the RF President Vladimir Putin announced that foreigners could be involved both in gas production and liquefaction but Gazprom would still remain the only subsurface user.
The first stage of the project provides for production of 23,7 billion cubic meters of gas and beginning of deliveries in 2013 and in 2014 - deliveries of liquefied gas. Gazprom planned to invest in the project about $13 billion.
Although Norwegians are considered to have abundant experience in shelf development, Gazprom picked the French. One can suppose, that in that way the Russian state monopoly, which pretends to part of assets of Gaz de France, manifests to French business and society that one can deal with Gazprom
Total was chosen among others because, according to Gazprom’s top-management, all Shtockman gas will be delivered in Europe. If it will be exported in the USA is still unclear, but during the recent lobster summit the topic was not discussed. From principles of Putin gas policy, that most likely means, that there is yet nothing to talk about.
Bottom line: Gazprom will develop Shtockman, it doesn’t have proper technologies (and, probably, enough funds); gas will be delivered in Europe; Gazprom minds availing itself of it for keeping on its European expansion. South Stream pipeline is promoted with Italians, in Sakhalin-2 and indirectly in Kovykta Gazprom collaborates with the British, North Stream is developed jointly with Germans, so Shtockman is left to the French.