24 Sep 2009 18:33

Shell ready to provide its technology for Yamal development

SALEKHARD. Sept 24 (Interfax) - Anglo-Dutch concern Shell is ready to operate jointly with Russian companies on the Yamal Peninsula by providing its technologies for developing hydrocarbon reserves and building a plant for the production of liquefied natural gas (LNG), the company's CEO, Peter Voser, said at a meeting regarding development of Yamal in Salekhard on Thursday.

Voser said that it is difficult to overestimate the extent of tasks for Yamal's development, adding that Shell believes that these difficulties could be overcome through a constructive partnership. He said that the company was ready to develop the necessary solutions for the feasible construction of facilities such as the LNG Plant based on Shell's experience with Sakhalin-2.

Voser said that by having a good partner it was possible to create a well-functioning operation in the Artic region. He added that the region would be a major supplier for gas for both the U.S. and the Asia-Pacific region.

The CEO of StatoilHydro, Helge Lund, said that his company was interested in further developing its partnership with Russia and Russian companies.

The CEO of Italy's Eni, Paolo Scaroni, said that his company welcomes new opportunities to operate in Russia. In addition, he stressed that, in regards to oilfields, a tax stimulus should be applied in order to attract foreign capital.

Scaroni told journalists that his company feels the conditions for foreign companies working in Russia are acceptable. Eni just yesterday sold Gazprom a 51% stake in Sever Energia, he said. He said Eni wants to increase its presence in the country and is prepared to participate in the construction of a LNG plant in Yamal.

The Russian government is providing serious support to this region's development, he said. Russia plans to develop Yamal over ten years, while it would take 50 years to develop resources in the Northern Sea, he said.

It was earlier reported that Shell of was one of the companies on a short list for the construction of an LNG plant in Yamal. The list also includes France's total.

A representative of U.S. company ExxonMobil stressed the necessity of discussing sales. He said that this would give the parties involved a more global perspective, which would help secure the partnership. Gazprom CEO Alexei Miller said Russia has a law on gas exports that only allows Gazprom to export gas. "This applies to Yamal too," he said.

James Mulva, the CEO of ConocoPhillips, noted the need to consider the particularities of developing the Yamal Peninsula. He said that development in Yamal required novel approaches in regards to gas sales. In addition, the parties involved need to set contract terms as soon as possible and understand how a company can invest funds, how management of the project will operators and what return would be made on capex, Mulva said.

An additional important element to be considered, according to Mulva, was how to select one company in comparison with another depending on the complexity of the project.

Commenting on the situation Russian Prime Minister Vladimir Putin said: "ConocoPhillips is almost a Russian company. It is present in Lukoil having a noticeable share packet and good experience with partnership in Russia. I hope that you will find other forms of cooperation."