Shtockman term issue

The terms of Shtockman deposit project implementation are still doubted. First day of Murmansk International Economic Forum, Urii Komarov, Chief executive of Shtockman Development AG did not exclude the opportunity that the shareholders may revise the terms of deposit putting into operation.

Most part of First Stage design works on Shtockman gas deposit development is completed and being approved. Maritime complex design documentation is elaborated in full and handed over to the expertise as well. It is known the owner and operator of infrastructure of the next 25 yeas - Shtockman Development AG – plans to pump shtockman gas through the pipeline linked to Severnyi Potok pipeline in Volkhov (Leningrad region) in 2013 and to produce liquefied natural gas (SPG) at a new plant near Teriberk (Murmansk region) in 2014. The company announced tendering for separate works execution, equipment procurement and vessels charter.

The so called pre-investment work cycle is to end in taking an investment decision by the company’s shareholders (Gasprom OJSC - 51%, Total S.A. (France) - 25% and StatoilHydro ASA (Norway) - 24%) early 2010. But because of the world economic recession investment advisability put under doubt. Several days ago Christopher de Margerie, president of Total S.A highlighted that taking into consideration present gas prices the terms defined for shtockman project implementation can turn unfeasible.

Today, in Murmansk Pier Nergararian, General Director of TOTAL E&P RUSSIE, announced, ‘Investors don’t have any doubtsthat the project is feasible from the technical point of view to the date’. ‘The time of engineer-designers is over, the time for economists has come to make decisions on investments,’ said the representative of Total. The terms of project implementation remain the main investment issue

’Terms issue depends on the market state. At the same time it important to provide sufficient participation of the Russian party in this project and the Russian participants ask for more time to take financial decisions,’ highlighted Urii Komarov. Head of Shtockman Development AG is sure there will be a balance found between the terms of investment issues revision and sufficient Russian participation. The shareholders shall timely make their decision, simultaneously a decision on project parameters change can be taken, Komarov is sure. ‘Can there be delays in project implementation? That is the question to the shareholders. Our task is to timely provide them with full information,’ he said.

Shtockman Development AG was founded in SwitzerlandMurmansk and Tiberka will obtain tax result of the company’s activity. which is related to the framework contracts between the shareholders. ‘Under the Russian legislation it is impossible to follow these agreements. It is necessary to arrange stable project financing that is possible only in conditions of stable financial and tax systems,’ explained Komarov. He also added that

Nadezhda Malysheva, from Murmansk International Economic Forum