Gazprom Abandons Arctic Gas Project For Now

Gazprom Abandons Arctic Gas Project For Now

"Right now we are not ready to work on this project," company spokesman Sergei Kuprianov said. "We are waiting for the emergence of more efficient technologies, less costly, or that market conditions change."

MOSCOW—Russian energy giant Gazprom OAO (IW 1000/16) said today it is giving up development of the Shtokman natural gas field under the arctic Barents Sea until new technology makes the project viable.

"Right now we are not ready to work on this project," company spokesman Sergei Kuprianov said. "We are waiting for the emergence of more efficient technologies, less costly, or that market conditions change."

Gazprom’s decision indefinitely postpones a project in which France's Total SA (IW 1000/9) remains a partner.

Huge Field Hard to Access

At 3.8 trillion cubic meters of gas, the Shtokman field is one of the world's largest untouched gas fields.

But because the field lies buried beneath the Barents Sea above the arctic circle, developing it would require technology breakthroughs and huge investment.

In March, Gazprom and Total said they were still working towards developing the project—which once also included Statoil ASA (IW 1000/27) as a partner until the Norwegian firm dropped out.

But the companies differed on strategy. Gazprom said it wanted to switch the Shtokman field to liquefied natural gas production because demand for piped gas in Europe has declined; while Total said it was still interested in pipeline gas for Europe and wasn’t certain that the money it had put up for initial exploration was being used to full effect.

Copyright Agence France-Presse 2013

TAGS: Energy
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