Gazprom, Total, StatoilHydro Form JV to Develop Shtokman Field

Gazprom, Total and StatoilHydro signed a Shareholder Agreement for the creation of Shtokman Development AG for phase one of the Shtokman field.

The agreement was signed at the central office of Gazprom by Alexey Miller, Chairman of the company's Management Committee, Christophe de Margerie, CEO of Total, and Helge Lund, CEO of StatoilHydro.

Gazprom holds a 51% stake in Shtokman Development AG while Total holds 25% and StatoilHydro a 24% stake. The company is registered in Switzerland.

Shtokman Development AG will be organizing the project engineering, development, construction, financing and exploitation of first phase facilities related to the development of the Shtokman field.

The partners also indicated that front end engineering design (FEED) for the project has commenced, and will be finished in the second half of 2009 allowing a final investment decision to be made. Among other things, Russian and international subcontractors for FEED studies have already been identified and a site has been chosen for the technical and transportation complex near Teriberka in the Murmansk region.

"This strategic partnership of our companies brings together long experience, vast resources and advanced technologies which are fundamental to the success of this unique project, which will guarantee reliable and long-term gas supplies for European consumers. The establishment of the Shtokman Development Company marks the starting point in the realization of the development of the Shtokman field," said Alexey Miller.

"The creation of this joint company by Gazprom, Total and StatoilHydro is a major milestone allowing us to combine our forces and experiences in large developments in harsh and remote environment to meet the challenges of the Shtokman project," said Christophe de Margerie.

"Shtokman can become a locomotive for new developments in the arctic region, with safe operations under cold and harsh condition. We look forward to the next stages in cooperating with Gazprom and Total on this large and challenging project by contributing with our competence and experience from the Norwegian Continental Shelf," said Helge Lund.

The Shtokman field, located in the Russian sector of the Barents Sea, holds 3.8 trillion cubic meters of gas reserves and around 37 million tons of gas condensate.

Phase one of the development of the deposit provides for a yield of 23.7 billion cubic meters of natural gas per annum, the start of pipeline deliveries to commence in 2013 and LNG in 2014.