MOSCOW, October 9 (RIA Novosti) - Gazprom [RTS: GAZP] will develop the vast Shtokman natural gas deposit off Russia's arctic shelf without foreign companies, Alexei Miller, the energy giant's CEO, told Russia Today TV Monday.
The Shtokman deposit holds an estimated 3.2 trillion cubic meters of natural gas, and 31 million metric tons of gas condensate in the Barents Sea. Some $12-14 billion will be invested in the project's first phase, and production will start in 2011.
A shortlist of companies competing for the project unveiled last September included Norway's Statoil and Norsk Hydro, France's Total, and U.S. giants Chevron and ConocoPhillips.
Miller said Gazprom had failed to find partners able to propose acceptable conditions for the development of the deposit, which will be the sole source of natural gas for Nord Stream (the North European Gas Pipeline) leading from Russia to Germany across the floor of the Baltic Sea.
"Gazprom was considering giving 49% in the Shtokman project to foreign companies for a long time," Gazprom said in a news release. "But foreign companies failed to offer assets commensurate with the volume and quality of the Shtokman deposit's reserves."
However, Gazprom said foreign companies could be involved in the deposit's development as contractors.
"The observation of terms and cost of the work will be the most important condition for these contracts," Miller said. "This decision is an additional long-term guarantee of reliable supplies of Russian gas to Europe, and a proof that the European market is playing a leading role for the company."
Miller also said Gazprom will prioritize supplies from the Shtokman gas deposit to Nord Stream.
"We have decided in favor of supplies of pipeline gas to the European market, over the production of liquefied gas," said. "Europe is Gazprom's No. 1 market, and Gazprom will supply more than 150 billion cu m of gas to the European market this year."
