Shtokman Field - History

History

The Shtokman field was discovered in 1988. It was named after the Soviet geophysicist Vladimir Shtokman (Russian: Владимир Штокман), a descendant of German emigrants, whose name was originally spelled Stockmann.

In the early 1990s, Gazprom started talks with a group of five Western companies to participate in the field's development. In 1992, the foreign consortium was pushed out by the Rosshelf consortium, a Gazprom subsidiary that comprised 19 Russian companies. in August 1995, Gazprom and Rosshelf signed a letter of intent with Norsk Hydro of Norway, Conoco Inc. of the United States, Neste Oy of Finland, and Total S.A. of France to evaluate the possible joint development of Shtokman field.

In January 1996, a project of a large floating liquefaction plant was designed, but this plan was abandoned and in March 2000, Rosshelf began developing plans for production and construction of a natural gas pipeline from the field via Murmansk to Vyborg. In 2001, Gazprom announced its intention to develop the gas field together with Rosneft. In 2002, the license for the field development and recovery was transferred from Rosshelf to Sevmorneftegas.

On 20 June 2005, Russia and Norway signed a number of agreements related to development of Shtokman field. On 28 June 2005 Russia signed a memorandum with France. In August 2005, Gazprom received bids from ConocoPhillips, ExxonMobil, Norsk Hydro, Statoil, Mitsui, Sumitomo Corporation, Royal Dutch Shell, Chevron Corporation, and Total to develop the field. In September 2005, Gazprom selected five companies—Statoil, Norsk Hydro, Total, Chevron and ConocoPhillips—as finalists in a search for partners to develop the field, but in October 2006 decided to reject all potential partners.

On 13 July 2007, Gazprom and French energy company Total signed a framework agreement 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 (now Statoil). The consortium of three companies, Shtokman Development AG, was established on 21 February 2008 in Zug, Switzerland.

Due to the global LNG oversupply and the United States shale gas, the shareholders of the project decided in 2010 to postpone it for 3 years. Based on this, the pipeline gas production might start in 2016 and LNG production in 2017.

The shareholders agreement expired on 30 June 2012 without development started. Statoil wrote off its investment into the project and handed shares back to Gazprom. In August 2012, Gazprom put the project on hold with a final investment decision on the first phase postponed until at least 2014, citing high costs and low gas prices. However, the company confirmed being in talks with foreign partners to find a new business model for the project. There are speculations that Royal Dutch Shell may become a project partner.