Posted by: russiaoilandgas | July 31, 2007

Shtokman Watch: Medvedev Admits More Partners ‘Makes Sense for Gazprom’

Gazprom Dmitry Medvedev Shtokman LNG Liquified Natural Gas Statoil Norsk Hydro ConocoPhillips Total Russia OilIt’s official: Gazprom will take more partners for it’s liquefied natural gas (LNG) Shtokman project. Regular readers of this blog and our mother site,  www.oilandgaseurasia.com, will be aware that our experts have long predicted Gazprom would likely take more partners to help it exploit the Shtokman gas field. First came the surprise news that French company Total would be awarded partnership status in Shtokman. Then came a series of official statements from the other potential partners, ConocoPhillips and the  Norwegian company Norsk Hydro, that they would still be open to involvment despite Total’s award. Finally, last week, Gazprom slashed investment in Shtokman by more than half, highlighting their need for third party investment. And now, Gazprom chairman, Dmitry Medvedev, has told Reuters “co-participation in this project makes sense for Gazprom. There could be two models for this — it could be where our partners join the project as fully fledged participants in the equity of the joint company, or as … contractors which in my view … could create a little less stability in relations.”

We at Oil and Gas Eurasia feel it is likely that when Statoil and Norsk Hydro complete their merger in October, a deal between the new Norwegian company and Gazprom will be struck to bring to bear the new company’s deep water and Arctic expertise in the tough Barents Sea conditions of the Shtokman field

ConocoPhilips, who, according to their CEO, have already been asked by Gazprom to re-enter talks on the Shtokman project, are another likely candidate due to the access and marketing power they can provide in the US market — the envisaged final destination for Shtokman’s LNG.

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