MOSCOW (Dow Jones Newswires), Feb. 16, 2011
French energy group Total said it is in talks to enter Russia's Yamal liquefied natural gas project, but said differences remain between shareholders in the Arctic Shtokman development ahead of a planned investment decision next month.
Total could become Russia's preferred partner as the energy superpower aims to become a major LNG producer, with two new Arctic LNG projects due to come on track in the coming decade.
Total, which is already partnering state gas giant Gazprom in the Barents Sea Shtokman project, is negotiating with Russia's biggest independent gas producer Novatek to take a 25% stake in the ambitious Yamal LNG project, Total's Russia head Pierre Nerguararian said at a conference here.
Novatek has said it will pick at least one foreign partner for the project, which aims to produce LNG on Russia's northern Yamal peninsula in the second half of this decade.
Apart from Total, industry titans such as ExxonMobil, ConocoPhillips and Shell have expressed interest in the project.
Nerguararian also said shareholders at the Shtokman project--which is controlled by Gazprom and has Total and Norway's Statoil as minority partners--have yet to agree on a design for the project.
"No decision has been made [on the design] as of today," he said, adding shareholders remain on track to make a final investment decision for the pipeline gas stage next month, and for the LNG stage in December.
The consortium originally planned to ship the mixture of natural gas and condensate gas from the offshore production site through two subsea pipelines to the shore. But last year Gazprom said it is cheaper to install a floating vessel to separate the gas and condensate before it is sent to shore through two different pipelines.
The two options are now being reviewed, Nerguararian said. Experts say if the original design is changed it is likely to lead to new delays in the project.
The ambitious Arctic field was originally planned to start production in 2013, but was last year delayed to 2016 as global demand for natural gas and LNG plunged amid an economic slowdown.
Copyright (c) 2011 Dow Jones & Company, Inc.
Most Popular Articles
From the Career Center
Jobs that may interest you