In accordance with the Agreement, the parties will set up a Special Purpose Vehicle (SPV) to organize the design, financing, construction and operation of the Shtokman phase one infrastructure. The SPV will own this infrastructure for 25 years from field commissioning.
Gazprom will have a 75% participating interest in the SPV and Total will have 25%. Upon completion of phase one operations, Total will transfer its share to Gazprom.
The Agreement provides for the possibility for other foreign partners to join the project up to a 24% participating interest at the expense of the Gazprom's share.
Gazprom owns 100% of the Shtokman license holder (OOO Sevmorneftegaz). It will also retain all hydrocarbons marketing rights.
The first phase of development is intended to produce 23.7 BCM/year of natural gas. Deliveries of pipeline gas are expected to commence in 2013 and the first LNG will be delivered in 2014.
The relationship between the SPV and OOO Sevmorneftegaz will be based on a contract under which the SPV will bear all financial, geological and technical risks related to the production of gas, condensate and LNG.
An agreement has been reached to start joint project implementation activities already in July 2007.
The Shtokman field is located in the central part of the Russian sector of the Barents Sea. As certified by the State Commission for Reserves under the RF Ministry of Natural Resources, its C1+C2 reserves are estimated at 3.7 trillion cubic meters of gas and over 31 million tons of condensate.
In October 2006, Gazprom's Management decided that Shtokman pipeline gas deliveries to the European market should be assigned a first-priority status. The Shtokman field was selected as the source of Russian gas exports to Europe by the North Stream gas pipeline.
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