The Board of Directors of Shtokman Development AG approved the budget of the company for 2008-2009 at the amount of over $800 million. Experts say that the amount is sufficient enough because the prices on pipes, materials, equipment and services will drop following the prices on oil, and the project will therefore require smaller spending.
The reserves of the Shtokman natural gas deposit located in the Russian part of the Barents Sea are estimated at some 3.8 trillion of cubic meters of gas. The Branch company of Russian’s gas giant Gazprom, Sevmorneftegaz, owns the license for the development of the deposit. Joint venture Shtokman Development has been created to implement the first stage of the project. Gazprom holds 51 percent in the joint venture, Total owns 25 percent and StatoilHydro holds 24 percent.
The Shtokman deposit was discovered 20 years ago. Russia has taken a number of efforts to start the development of the deposit, but none of the attempts proved to be successful due to the impossibility to coordinate the investment constituent.
The participants launched the first phase of the project in July 2007. the first phase stipulates the mining of 23.7 billion cubic meters of gas a year. Fifty percent of the extracted fuel will be transported via pipelines to consumers, whereas the remaining 50 percent will be used for the production of liquefied natural gas. The deposit will be developed to deliver natural gas to Europe and the Atlantic countries, including the United States. The pipeline transportations are said to begin in 2013, whereas the production of liquefied natural gas is supposed to start in 2014.
The 800-million-dollar investment will be enough to evaluate the entire project, which includes seismic activities, probe boring and the interpretation of results, Alexander Nazarov, an analyst with Metropol investment company said. It is not ruled out that the funds will be enough to purchase a drilling platform. A drilling platform costs not less than $300 million.
The development of the Shtokman deposit has become one of the biggest priority of Gazprom. Many of its landmark deposits are currently entering the stage of depletion. That is why the gas monopolist will most likely take maximum efforts to develop the deposit.