Shtokman field

The Shtokman field (also Stockman field; Штокмановское месторождение), one of the world's largest natural gas fields, lies in the central part of Russian sector of the Barents Sea, north of Kola Peninsula. Its reserves are estimated at 3.8 trillion cubic meter of natural gas and more than 37 million tons of gas condensate.

Natural gas reserves were discovered in 1988, but the field was not developed owing to extreme Arctic conditions and the depth of the sea. The sea depth in the area varies from 320 to 340 m. The Shtokman field was named after the Soviet geophysicist Vladimir Shtokman (Владимир Штокман), a descendant of German emigrants, whose name were originally spelt Stockmann.

Development

In September 2006, Gazprom completed drilling of appraisal well No. 7 in the field, and expects the gas production to be running by 2013-2015. However, Norwegian environmental group Bellona believes that Shtokman field will probably not be on stream before 2035 because they claim Gazprom lacks the expertise to develop the field by themselves. Also Russian scientists have warned that the Shtokman's development will face greater problems as global warming unleashes vast icebergs into the Arctic. The Shtokman Development Company plans to address this challenge by using floating removable platforms, which can be moved around in case of emergency situations.

Technical features

At the initial stage the project is expected to produce 22.5 billion cubic meter (bcm) of natural gas and 205,000 tons of gas condensate annually. Later the production is expected to increase up to 70 bcm of natural gas and 0.6 million tonnes of gas condensate. All extraction facilities will probably be located under water. The development costs are estimated at US$15 billion to US$20 billion, although according to the estimate by Alexander Medvedev, deputy chairman of Gazprom’s management committee, the field’s development costs will be only US$12 billion.

Originally it was planned to ship Shtokman's gas to the United States as liquid natural gas (LNG). Later it was indicated by Gazprom that the majority of produced natural gas would be sold to Europe via the planned Nord Stream pipeline. For this purpose, the pipeline from the Shtokman field to the Murmansk Oblast and further via Kola peninsula to Volkhov in the Leningrad Oblast will be built. The project of LNG production is delayed until 2014 and the LNG plant will be laid in by the village of Teriberka, about north-east of Murmansk. The front-end engineering and design (FEED) is divided between three companies. The onshore transportation and technological complex, including an LNG plant, will be prepared by Technip. DORIS Engineering will prepare the subsea production system and the offshore technological platform. JP Kenny, a subsidiary of Wood Group, will design together with Rubin Design Bureau and Giprospetsgaz, a subsidiary of Gazprom, the long subsea pipeline from the Shtokman field to south of Murmansk.

Project company

The license to explore for and produce gas and condensate on the Shtokman field is owned by Russian company Sevmorneftegaz, a wholly-owned subsidiary of Gazprom. Sevmorneftegaz is a sole customer for the design and construction of the field infrastructure, including a production complex, a pipeline network and an LNG plant, and has all marketing rights for hydrocarbons of the Shtokman field. On 13 July 2007, Gazprom and French energy company Total signed a framework agreement, according to which Gazprom and Total will set up Shtokman Development Company to organize the design, financing, construction and operation of the Shtokman phase one infrastructure. On 25 October 2007, similar contract was signed between Gazprom and StatoilHydro. Shtokman Development Company will bear all financial, geological and technical risks related to the production activities. It will own infrastructure for 25 years from field commissioning. The relationship between the Shtokman Development Company and Sevmorneftegaz will be based on a contract.

Shtokman Development AG was incorporated on 21 February 2008 in Zug, Switzerland. Gazprom owns 51% of shares in Shtokman Development AG, while Total has 25% and StatoilHydro 24% of shares. Upon completion of phase one, Total and StatoilHydro will transfer their shares in Shtokman Development Company to Gazprom.

Nuclear controversy

Norwegian daily Aftenposten reported on 23 November 2007, that the Shtokman development would be nuclear powered by using a floating nuclear power plant. The plan was criticized by the environmental group Bellona.

References

External links

• Shtokman Development AG
• Shtokman website by Supplier Network Oil and Gas (English, Norwegian)