French Total seeks 20% stake in Shtokman project

Publish date: February 15, 2006

France's Total, the world's fourth largest oil and gas company, is seeking a 20% stake in the Shtokman gas project, which is owned by Russian energy giant Gazprom.

According to Total’s president of exploration and production Christophe de Margerie, foreign companies would be allowed an aggregated 49% stake in the project, since Gazprom held the 51% majority stake. The official said the company could seek a 25% stake if Gazprom chose only two partners instead of three, but a 20% stake seemed more realistic. He refused to disclose the company’s upstream and downstream assets for the project, adding that Total plans to be involved in the production and sale of liquefied natural gas.

According to de Margerie, some issues have yet to be coordinated, including the assessment of existing upstream assets proposed by the French company, and those that are being prepared for the project, which is set to start in 2008. Russian natural gas monopoly Gazprom is currently selecting partners for the Shtokman project, RIA Novosti reported. The shortlist includes Norway’s Statoil and Hydro, France’s Total and U.S. companies Chevron and ConocoPhillips.

The Shtokman deposit is located in the Barents Sea, 650km from the Russian northern port of Murmansk. It contains an estimated 3.2 trillion cubic meters of natural gas and 31 million metric tons of gas condensate. Gazprom officials estimate its annual output at 100 billion cubic meters of gas, with around 30 billion at the very start, of which 22 to 24 billion cu m will be liquefied to produce up to 15 million tons of LNG for America.

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