Shtokman Construction to Start in 2012

Gazprom Dobycha Shelf General Director Gennady Gavrilin has said that construction on the Russian Shtokman gas field in the Barents Sea will begin in 2012, with first gas expected for 2016.

"We are now about to finish projecting and surveying, and the road to the future industrial sites is 70 percent ready," Mr. Gavrilin told Russian newspaper RIA Novosti on Sunday. "If the first gas from Shtokman is to be produced in 2016, the harbor and LNG plant must be ready in 2017. We are absolutely sure we can keep this schedule."

Gazprom is currently under pressure on the Shtokman gas field, with partner in the project Statoil pressing for a decision on tax breaks from the Russian government before a final investment can be made.

Speaking at the second Norwegian-Russian Business Forum, President of Statoil Jan Helge Skogen said that promised tax breaks from the Russian government must be implemented to ensure the company's investment was worthwhile.

"The project as it is today is not commercially viable," he said. "It is critical that things now fall into place."

Speaking to The Moscow Times on Thursday, Mr. Skogen also said that Statoil were "trying to communicate a sense of urgency" on the matter.

Mr. Skogen's sentiments were echoed by the Norwegian government who hold a 67 percent stake in Statoil.

"It is essential that the Shtokman project produces a return on investment," Minister for Trade and Industry Tronde Giske said.

Statoil holds a 24 percent stake in the Shtokman project, with French company Total holding 25 percent, and Gazprom, as operator, holding the remaining 51 percent.