StatoilHydro to Partner in Gazprom’s Barents Sea Shtokman; Largest Undeveloped Offshore Gas Field

26 October 2007

Gazprom has selected StatoilHydro as a third partner in the Shtokman development in the Barents Sea, phase 1. The agreement gives StatoilHydro a 24% equity interest in Shtokman Development Company in which Gazprom (51%) and Total (25%) are the two other partners.

Location of the Shtokman development. North is at the bottom of the diagram. Click to enlarge.

The Shtokman field, located in the Russian part of the Barents Sea, is the world’s largest undeveloped offshore gas field with gas initially in place (GIIP) of around 3,700 billion cubic metres (bcm). The annual production is estimated to be 23.7 bcm for the first phase. The basis for phase 1 includes both LNG and piped gas.

Shtokman Development Company will be responsible for planning, financing and constructing the infrastructure necessary for the first phase of the Shtokman development and will own the infrastructure for 25 years from start of commercial production. This includes offshore installations, pipeline to shore and the onshore processing plants for both liquefied natural gas (LNG) and piped gas.

The implementation of the project is subject to a final investment decision in the second half of 2009.

The agreement signed today will open a new page in our cooperation with the merged StatoilHydro. We have giant reserves of gas in the Barents Sea, while our partners from Norway have good experience in production and transportation of gas in harsh Arctic conditions. Our joint efforts will be the keystone of success in the Arctic.

—Alexei Miller, Chairman of Gazprom