Total : Gazprom and Total Sign a Framework Agreement for Cooperation in the First Phase of Shtokman Development
07/13/2007| 05:35am US/Eastern
Today, at Gazprom's headquarters, Gazprom's
acting Chief Executive Officer Alexander Ananenkov, General Director of
OOO Sevmorneftegaz Yury Komarov, and Chief Executive Officer of Total
(NYSE:TOT) (LSE:TTA) (Paris:FP) Christophe de Margerie have signed a
Framework Agreement for Cooperation in the Development of the First
Phase of the Shtokman Gas Condensate field.
In accordance with the Agreement, the parties will set up a Special
Purpose Vehicle (SPV) to organize the design, financing, construction
and operation of the Shtokman phase one infrastructure. The SPV will own
this infrastructure for 25 years from field commissioning.
Gazprom will have a 75% participating interest in the SPV and Total will
have 25%. Upon completion of phase one operations, Total will transfer
its share to Gazprom.
The Agreement provides for the possibility for other foreign partners to
join the project up to a 24% participating interest at the expense of
the Gazprom's share.
Gazprom owns 100% of the Shtokman license holder (OOO Sevmorneftegaz).
It will also retain all hydrocarbons marketing rights.
The first phase of development is intended to produce 23.7 BCM/year of
natural gas. Deliveries of pipeline gas are expected to commence in 2013
and the first LNG will be delivered in 2014.
The relationship between the SPV and OOO Sevmorneftegaz will be based on
a contract under which the SPV will bear all financial, geological and
technical risks related to the production of gas, condensate and LNG.
An agreement has been reached to start joint project implementation
activities already in July 2007.
ZAO Sevmorneftegaz (a 100% subsidiary of OAO Gazprom) holds a license
to explore for and produce gas and condensate in the Shtokman field and
is a sole customer for the design and construction of the field
infrastructure, including a production complex, a pipeline network and
an LNG plant.
Total is one of the world's largest energy
companies. Its activities in more than 130 countries worldwide cover the
entire operation cycle from production to sales of refined products to
Total is also involved in the transportation and storage of natural
gas, as well as in electricity generation at combined-cycle gas-fired
power plants and use of renewable energy sources. It is also active in
the marketing and sales of natural gas, electricity, LNG, LPG and coal.
The Shtokman field is located in the central part of the Russian
sector of the Barents Sea.
As certified by the State Commission for Reserves under the RF
Ministry of Natural Resources, its C1+C2 reserves are estimated at 3.7
trillion cubic meters of gas and over 31 million tons of condensate.
In October 2006, Gazprom's Management
decided that Shtokman pipeline gas deliveries to the European market
should be assigned a first-priority status. The Shtokman field was
selected as the source of Russian gas exports to Europe by the North
Stream gas pipeline.
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