Investment in Shtokman estimated at hundreds of billions of dollars - Yazev
MOSCOW. Nov 15 (Interfax) - Investment in the Shtokman project is estimated at hundreds of billions of dollars, and shareholders had better moderate their appetites, Deputy State Duma Speaker Valery Yazev thinks.
"The costs have been called fantastic, in the hundreds of billions of dollars," Yazev said.
The question of how much the government is prepared to provide tax breaks for the project is worth considering, he said. "It would be desirable that the shareholders put together their terms not too avariciously. The Russian government and the Russian people do not need Shtokman to be opened at any price. The government also has to get something from the project," he said.
The project's foreign shareholders, Total and Statoil, point out that the project is technically doable, but are requesting breaks from the government.
Total's general representative in Russia, Pierre Nerguararian, has said that technologically the project is completely ready to begin, but that the commercial aspect of it is still a matter of some difficulty as the "costs are too high."
Statoil's president in Russia, Jan Helge Skogen, has noted that the company would like to get an easing of the export duty on liquefied natural gas (LNG), and also the natural resource extraction tax (NRET). He said the benefit to Russia is in that, according to the research done, added GDP growth would amount to 0.7% during the time the project is being carried out, and that there would be 60,000 additional jobs created either directly or indirectly.
The head of project operator Shtokman Development, Alexei Zagorovsky, said that the direct and indirect effect on Russian GDP as the first phase of the deposit is built and put into operation would be $420 billion.
In February of 2008, Gazprom, Total, and Statoil inked a shareholder agreement concerning the creation of the special purpose entity Shtokman Development. Its task is financing and building infrastructure for moving gas to shore and liquefying it in the first phase of the project.
In June of last year, Gazprom and Statoil clinched an agreement on scientific and technical cooperation, according to which the signatories will be developing their mutual efforts, including in such areas as geological prospecting, deposit development, the development of technology and equipment for transporting hydrocarbons, northern sea environment and territory, and energy conservation.
The shareholders in SDAG are Gazprom with 51%, France's Total - 25% and Norway's Statoil - 24%. Gazprom Dobycha Shelf owns the license for the development of Shtokman field with its 3.9 trillion cubic meters of recoverable reserves. The field is located in the central section of Russia's sector in the Barents Sea.
A final investment decision on the project is expected next month.