09 June 2004 06:26
Russia, U.S. discuss PSA for Shtokman field
The meeting was held to discuss the possibility of investment
cooperation between the two countries. Materov said that it is
MOSCOW. June 9 (Interfax) - Participants in a meeting of the Russian-U.S. working group on energy in Moscow on
Wednesday discussed building a plant to produce liquefied natural gas and the development of the Shtokman gas condensate
field under a production sharing agreement, Russian Deputy Industry and Energy Minister Ivan Materov said.
necessary to consider investment in concrete projects, particularly in the production of LNG.
Answering questions from journalists about whether U.S. investors might participate only in the construction of the
plant, Materov said "this is a topic for negotiation. Gazprom is interested in having a large U.S. company
participate in the development of Shtokman." Materov also said that attracting investment into this project with
the help of U.S. Ex-Im Bank was also discussed.
In turn, Deputy U.S. Energy Secretary Kyle McSlarrow said that the sides prepared grounds on which investment
decision may be reached - the companies themselves will reach concrete agreements. McSlarrow said that this is their
business, and that the participants in the meeting only prepared the ground for this type of discussion.
During the meeting the Russian side announced that it might speed up the development of the Shtokman field.
After the meeting the sides signed a protocol saying that a sub- group on investment will hold further consultations
on this issue until a special group of gas cooperation is set up.
The sides agreed to hold the sixth meeting of the energy working group in the U.S. in fall 2004.
McSlarrow announced earlier that the U.S. plans to increase gas imports from 3.5 trillion cubic feet to 7 trillion
cubic feet or about 200 billion cubic meters, by 2025.
He said that talks are currently underway with U.S. Ex-Im Bank, OPIC and other institutions about possible financing
for supplies of LNG.
of the Shtokman field prepared by ConocoPhillips, which is being
considered as a possible partner for Gazprom and Rosneft in the
The deputy secretary said that the average cost of the project to supply LNG is $5 billion - $10 billion. He said
that the U.S. may need up to $100 billion to ensure supplies of gas by 2025.
Gazprom and Rosneft are already holding talks with ExxonMobil, ConocoPhillips, ChevronTexaco and Shell for the joint
development of the Shtokman field, which should be concluded by the end of the year.
According to a preliminary feasibility study for the development
project, investment in the project is estimated at $10 billion- $15 billion.
The first stage of development will involve production of 30 billion cubic meters of gas per year. Ryazanov said that
the company plans to process 25 billion - 26 billion cubic meters of this at a liquefied natural gas plant. The rest
will be supplied to the domestic market.
Gazprom Deputy CEO Alexander Ryazanov said that the liquefied natural gas plant would consist of three lines with a
capacity of about 7 million tonnes each, providing an overall capacity of 20.1 million tonnes.
Gazprom plans to export about 90% of liquefied natural gas from the Shtokman field to the U.S., but 10%-15% of the
liquefied natural gas may be exported to Europe.
ZAO Sevmorneftegaz, a company formed jointly by Rosneft- Purneftegaz and Rosshelf, subsidiaries of Rosneft and
Gazprom, is licensed to develop Shtokman field. Shtokman holds recoverable reserves of 3.2 trillion cubic meters of gas
and 27 million tonnes of oil. Commercial production is to begin in 2010. [RU EUROPE ASIA EEU EMRG ENR ELG NGS US TRD] rd
[Interfax] |
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