Gazprom Rejects Foreign Partners for Shtokman


Shtokman Field, Russia
(Click to Enlarge)
MOSCOW Oct 9, 2006 (Dow Jones Newswires)

Russian natural gas giant OAO Gazprom (GSPBEX.RS) will reject bids from all five foreign companies hoping to join in developing the massive Shtokman natural gas field, and will instead develop the field on its own, Gazprom chief executive Alexei Miller said Monday, Russian newswires reported.

Five international oil majors had hoped to take minority stakes in the project including U.S. companies ConocoPhillips (COP) and Chevron Corp. (CVX). France's Total SA (TOT). Norwegian companies Statoil ASA (STO) and Norsk Hydro ASA (NHY) had also been on the shortlist.

Separately, Miller said gas from Shtokman would go primarily to Europe by pipeline - instead of by tanker in the form of liquefied natural gas to the U.S., as had been originally proposed.

Miller said the gas will be used to feed the Nord Stream pipeline - the new name for the North European Gas Pipeline - which is being built from the Russian town of Vyborg across the Baltic Sea to Germany.

All five companies had pushed hard to join the project, and Gazprom had earlier said it would accept two or three of them as minority partners. The Russian company had repeatedly pushed back the deadline for choosing partners, citing the complexity of the five bids. Monday, Miller declared that none of the five companies' proposals were acceptable.

The offshore Shtokman field holds about 3.6 trillion cubic meters of gas.

The reserves at Shtokman are enough to supply all U.S. gas needs for more than five years at current rates of consumption, according to a 2006 report from BP PLC (BP).

Total declined to comment immediately. Nobody was immediately available to comment at Norsk Hydro, Statoil, Chevron or ConocoPhillips.

"Gazprom had examined giving 49% of the Shtokman project to foreign companies," Miller said in a press release issued by Gazprom later Monday. "However, the foreign companies could not offer assets that compare to the volume and quality of Shtokman's reserves."

Miller also added, however, that some LNG was planned to be produced at the site.

Instead of giving foreign partners equity in the project, however, Miller said Gazprom would attract "authoritative international companies" to work as subcontractors in helping to develop the field.

"This decision is a further guarantee of the dependability of Russian gas deliveries to Europe for the long term, and it is proof that the European market has the highest importance to the company," Miller said.

Copyright (c) 2006 Dow Jones & Company, Inc.

Related Companies
 Company: Norsk Hydro ASAmore info


 - Sentry Petroleum Appoints Former Norsk Hydro Analyst to Board of Directors (Dec 29)
 - Hydro Under Investigation for Former Libya Oil Operations (Oct 7)
 - SeaBird First Contract Award for SeaBed Operations (Apr 28)
 Company: OAO Gazprommore info
 - EU Court Rejects Polish Bid To Halt Opal Pipeline Deal, Verdict In 2019 (Jul 21)
 - New UK Listing Rules Set to Attract State Companies Beyond Aramco (Jul 17)
 - Hungary Commits to Russia Gas Route as Poland Looks to US (Jul 7)
 Company: Statoilmore info


 - Europe's Oil Giants Recover From Three-Year Slump (Jul 27)
 - Statoil Scales Down Exploration Plans For 2017 (Jul 27)
 - Greenpeace Activists Protest Near Oil Rig In Norway's Arctic Sea Area (Jul 21)
 Company: Total S.A.more info
 - Europe's Oil Giants Recover From Three-Year Slump (Jul 27)
 - Suncor, Total Argue Over Cost Of Fort Hills Project (Jul 27)
 - Total Beats 2Q Expectations Helped By Strong Cash Flow, Costs Cuts (Jul 27)
 Company: ConocoPhillipsmore info


 - ConocoPhillips Trims CAPEX After Posting Quarterly Loss (Jul 27)
 - ConocoPhillips to Sell Barnett Assets for $305 Million (Jun 29)
 - ConocoPhillips To Lay Off 300 In Canada After Cenovus Deal (May 4)
 Company: Chevron Corporationmore info
 - Mexico Delays Next Oil Auction to Let Huge New Find Sink In (Jul 17)
 - White House Is Said to Be Unlikely to Restrict Venezuelan Crude (Jul 7)
 - Oil Producers' Cost-Cutting Swept Away by New Price Decline (Jun 30)
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


From the Career Center
Jobs that may interest you
US Fort Lupton: Entry Level Technology Services Technician
Expertise: Production Engineering
Location: Fort Lupton, CO
 
Completions Engineer I Job
Expertise: Petroleum Engineering|Production Engineering|Workover or Completion
Location: Houston, TX
 
Technical Services Manager - Production Chemicals
Expertise: Chemist|Production Engineering|Technical Manager
Location: Midland, TX
 
search for more jobs

Brent Crude Oil : $50.97/BBL 1.53%
Light Crude Oil : $48.75/BBL 1.79%
Natural Gas : $2.92/MMBtu 0.68%
Updated in last 24 hours