Pffft

30 Aug 2012 By Kevin Allison

The Russian energy giant has shelved plans to develop the giant Shtokman offshore field, all-but-killed by cost overruns and the shale gas revolution. The demise of the flagship development is a sign of the company’s waning strategic heft. Reversing that may prove impossible.

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Gazprom, Russia’s biggest gas producer, said it had put development of a giant Arctic offshore gas field on hold indefinitely on Aug. 29.
Gazprom holds 51 percent of the Shtokman field, which was discovered in the 1980s and lies 550 kilometres off the Russian coast in the Barents Sea.
Shtokman is thought to contain up to 4 trillion cubic metres of natural gas, enough to supply the entire world’s current gas needs for more than a year. But economics of the project had become challenged after years of delays and cost overruns.
The project’s planners had envisioned selling liquefied natural gas from Shtokman to the United States, but U.S. demand for LNG imports has disappeared in recent years due to a domestic shale gas boom.
Minority partners Total and Statoil agreed that the project could not go forward because of rising costs, according to Gazprom’s head of production. Statoil earlier this month wrote down $336 million of investment in Shtokman and handed back its 24 percent stake in the venture.
A Statoil spokesman said the partners were still in talks on the project’s future.

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