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Last Updated: Monday, 9 July 2007, 15:41 GMT 16:41 UK
Gazprom in gas project climbdown
Gazprom logo
The Barents Sea holds about a quarter of the world's gas reserves
Russian gas monopoly Gazprom has said it is close to pairing with foreign firms to start developing the world's largest offshore gas field.

The comments made by one of the firm's top executives, Alexander Medvedev, mark a dramatic U-turn from its tough stance last year.

Last October, Gazprom said it alone would exploit the untapped Shtokman gas reserves in the Barents Sea.

Signing a deal would be a major boost for any of the overseas firms involved.

Norway's Statoil and Hydro, Conoco Phillips and Chevron in the US and France's Total had all been shortlisted as potential members of a consortium to start pumping gas from the strategically-crucial Shtokman field on the ice-free Kola peninsula.

But Gazprom dealt them all a huge blow last October when its chief executive Alexey Miller said Gazprom would take control of 100% of the resources.

'Project complexities'

The 1,400 square kilometre field has the potential to become the world's largest offshore gas field with 3.2 trillion cubic metres of gas contained in reservoirs two kilometres below the seabed - itself at a depth of 350 metres.

The cost of the operation has been estimated at between $20bn (9.9bn) and $30bn which Gazprom would have to foot if it decided to go it alone.

Shtokman field map
Gazprom could open the Shtokman gas field to foreign partners

Mr Medvedev told the Financial Times newspaper that Gazprom was in talks with foreign companies to allow them to "share in the economic benefits of the project, share the management and take on a share of the industrial, commercial and financial risks".

This would be through overseas companies taking a stake in the company created to operate Shtokman, while Gazprom will retain control of the license to the field.

Observers point to the complexities of the project - including freezing weather conditions, icebergs, and lack of infrastructure to transport the gas to market - for Gazprom's shift in tone.

A Gazprom spokesman told the BBC that the company' was concerned about the potential for operating costs to spiral: "We can't afford to take those financial risks."

Norway's Statoil, a key contender in the battle for partnership with Gazprom, told the BBC that it had enjoyed "good relations" with the Russian firm for some time, but refused to comment on the development.

Separately, Gazprom has also revived plans to construct liquid natural gas plants 555 kilometres away from Shtokman in the ice-free port of Murmansk, possibly to be exported by super-tankers to the US.

This also signals a change of intention from last year's suggestions that the bulk of its gas output would be sent to Germany and the rest of the European Union through the northern European Pipeline across the Baltic Sea.


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