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Russia's Gazprom develops new model of cooperation with foreign companies

Russian natural gas giant Gazprom is close to offering foreign companies a role in tapping its giant Shtokman gas field in the Barents Sea, the company said Monday, marking an apparent policy shift.

Gazprom had previously suggested it would allow foreigners only a minor role.

The state-controlled company is in talks with foreign companies about a "new model" of cooperation that would allow "foreign partners to share in the economic benefits of the project, share the management, and take on a share of the industrial, commercial and financial risks," Deputy CEO Alexander Medvedev said in comments confirmed by its press service. The remarks initially appeared in an interview with the Financial Times.

JSC Gazprom has been in talks on Shtokman with Norway's Statoil ASA and Norsk Hydro ASA, France's Total SA and U.S.-based ConocoPhillips. Medvedev said that a deal was "very close."

A possible deal could see foreign companies take a stake in the company that will operate the project, rather than the Gazprom subsidiary that owns the actual license, according to a company spokesman who requested anonymity on the grounds that he was not authorized to discuss the potential deal.

This arrangement would allow the companies to include a share of Shtokman's estimated 3.7 trillion cubic meters (131 trillion cubic feet) of gas reserves in their accounts, he said. In October, Gazprom suggested that foreign companies would only be welcome as contractors.

That announcement came amid cooling relations between Russia and the United States, in part over concerns that President Vladimir Putin is backtracking on democracy and human rights. Analysts suggested at the time that evidence of this tension was a simultaneous decision to shift the focus of the project from liquefied natural gas that could be shipped to the U.S. among other destinations to providing gas for a planned pipeline to Europe.

But the liquefied natural gas project appears to have returned to the foreground: Medvedev said that after pumping its first gas in 2013, the first LNG would be shipped in 2014.

"The emotions have calmed down" since October, said Valery Nesterov, oil and gas analyst with Troika Dialog bank in Moscow.

Analysts have said Gazprom's limited experience with LNG, coupled with the harsh environmental conditions mean that the technologies and expertise foreign companies can bring to the project are key to its success.

"With a little sober reflection Gazprom has understood that for such a huge and unusual project ... the most appropriate formula is for foreigners to enter the project," Nesterov said.