Total: Shtokman partners still studying project viability
BY GERALDINE AMIEL
PARIS -- Total insisted that the partners involved in the potential development of the Shtokman natural gas field, in Arctic Russia, were still studying the viability of the project but for now had concluded that in the current conditions the costs of development were too high.
In a brief statement, Total, which teamed up with Gazprom and Statoil to develop a LNG project at Shtokman, said it "would like to point out that there has been no decision by partners to postpone Shtokman project sine die."
Total was reacting to reports that Gazprom, which is the operator, has indefinitely postponed the investment decision on Shtokman.
Launched in the 1990s, Shtokman has been repeatedly delayed, notably on disagreements between partners over investment terms, on the technical challenges set by the extreme Arctic conditions and on the changes to the world's gas market following the boom of United States shale gas, which precipitated prices to their lowest.
Yet as Total's comments underscore, the increase demand for natural gas and the huge potential of the field means the project remains too important to be dropped.
The partners have come to the conclusion that the cost of the project with its current definition is too high, Total explained in its brief statement, adding that "teams are pursuing technical studies to achieve an economically viable project."
Dow Jones Newswires