Shtokman – pros and cons

As usual, news about the development of the Shtokman project is contradictory. BarentsObserver brings you an overview over media coverage on the Shtokman project in Russian and Norwegian media the last couple of days.

Gazprom halves Shtokman investments
Russian gas major and main partner in the Shtokman project Gazprom has halved the company’s investments in the project, Russian Business Consulting reports. The investment plan was originally on RUB 11.5 billion, but has now been cut to RUB 5.5 billion.

- Obviously, the gas monopolist is not too certain about the realization of the project, the web site notes. Gazprom plans to invest RUB 5.5 billion in the Shtokman project in 2010 – 2 billion in capital investments and 3.5 billion in long-term financial investments. In 2009 Gazprom investments in the project amounted to RUB 13 billiont.

The leadership in Gazprom denies that the cutbacks imply another postponement of the project, Russian Business Consulting writes.

Read also: Gazprom to spend more in Southeast Asia than in Shtokman

U.S. company to design LNG plant
Chicago Bridge and Iron has been awarded a contract to design the onshore gas storage facilities and LNG export terminal for the Shtokman project, web site Oilru.com reports.

Chicago Bridge and Iron (CB&I) is one of the largest companies in the world specializing in projecting for oil and gas companies. The company has won the Front End Engineering and Design deal for the Shtokman LNG plant at Teriberka which was awarded by Giprospetsgas Joint Stock Company, which is the overall designer of the project. Design work is due for completion next year.

The work involves Front End Engineering and Design for multiple 160,000 cubic meter full containment LNG storage tanks, process pipelines and related loading facilities at the site.

CB&I is also working on the Barents Sea Goliat development for Eni.

The LNG plant is part of the second phase of the Shtokman development project, where only Gazprom is involved.

Shtokman Development plans to close all tender procedures for the first phase of the project in December 2010, web site LawTEK writes. In January-February everything must be ready for the first calculations of the costs, so that the final investment decision on the project can be made in March.

Norwegian analyst: No Shtokman gas before 2020
Norwegian oil major Statoil says that the development of the Shtokman gas field in the Barents Sea is going according to plan and that production will start in 2016. Norwegian oil analyst Torbjørn Kjus in DnB Nor Markets doubts that there will by any start-up on the field before 2020 because of changed market conditions.

According to Bård Glad Pettersen, public relations manager for foreign projects in Statoil, the project is going according to plan and the final investment decision will be made in 2011, web site e24 reports. He believes that production will start in 2016.

Torbjørn Kjus has little faith in Statoil’s predictions: - I doubt there will be any start-up before 2020. Much of the gas from Shtokman was planned to be exported to the U.S. market, but with the development of unconventional resources that we see now, this gas will have to be sent somewhere else, he says.

Glad Pettersen believes that LNG will be in great demand also in the future, especially in Asia. He does not want to comment on the question about whether the partners are considering the possibility for transporting LNG eastwards through the Northeast Passage.

Glad Pettersen also rejects the recent Russian speculations that Statoil will be less active in the project after the signing of the Norwegian- Russian agreement on delimitation of the Barents Sea.