Total/Gazprom sign Shtokman accord

Gazprom, OOO Sevmorneftegaz, and Total have signed a framework agreement for cooperation in a first-phase development of the Sktokman gas-condensate field in the Barents Sea.
July 13, 2007

Offshore staff

MOSCOW, Russia --Gazprom, OOO Sevmorneftegaz, and Total have signed a framework agreement for cooperation in a first-phase development of the Sktokman gas-condensate field in the Barents Sea.

Under the accord, the three parties will set up a Special Purpose Vehicle to coordinate design, financing, construction, and operation of the phase one infrastructure, which the SPV will own for 25 years from field commissioning. The SPV also will assume all financial, geological and technical risks related to production.

Gazprom will have a 75% interest in the SPV, and Total the remaining 25%. It will transfer its share to Gazprom on completion of phase one operations. The agreement also allows for other foreign partners to take a 24% interest in the project from Gazprom. The latter owns 100% of the Shtokman license holder, OOO Sevmorneftegaz.

The first phase should produce 23.7 bcm/yr (837 bcf/yr) of gas, with pipeline deliveries to Europe due to start in 2013, followed by first LNG in 2014. Shtokman has reserves estimated at 3.7 tcm (131 tcf) of gas and 31 million tons (28.12 million metric tons) of condensate.

07/13/2007

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