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Gazprom, Norway in talks on Shtokman gas project

Gazprom said Monday it was in talks with Norway on prospects for cooperation in developing hydrocarbons in the Arctic region, in particular the vast Shtokman gas field.

Alexei Miller, the head of the Russian energy giant, and Norwegian Petroleum and Energy Minister Odd Roger Enoksen, met Monday in Moscow to discuss cooperation in the development of offshore oil and gas fields and the participation of Norwegian companies in major Arctic hydrocarbon production schemes. "The sides discussed the possibility of joint work on prospecting oil and gas in the Arctic region, and the development of technologies for the exploration of offshore fields in the area, including the Shtokman field," Gazprom said in a statement. The un-tapped Shtokman field in the Barents Sea is one of the world's largest offshore natural gas deposits, with reservoirs 2 km below the seabed holding an estimated 3.2 trillion cubic meters of gas and 31 million metric tons of gas condensate.

Gazprom plans to build a liquefied natural gas plant near the site. Some $12-14 billion will be invested in the project's first phase, and production will begin in 2011. Norway's Statoil and Norsk Hydro, US oil majors Chevron and ConocoPhillips, and France's Total, had been short-listed to develop the Shtokman field, but Gazprom announced last October it would develop the deposit on its own. However, Gazprom said it could attract partners with expertise in liquefying natural gas and work in 'severe weather conditions,' as contractors.

ConocoPhillips, a major player on the market of liquefied natural gas (LNG), has confirmed its readiness to continue talks under new conditions of cooperation, while Chevron has decided against joining the Shtokman project. The deposit will be the only source of natural gas for the ambitious Nord Stream gas pipeline that will link Russia to Germany along the Baltic seabed. Norway is the second largest exporter of natural gas to Europe after Russia. In 2005, the country supplied European consumers with 80.9 billion cubic meters of gas. Norway's gas reserves are located in the North Sea and total about 3.1 trillion cubic meters. (