Shtokman Development might abandon LNG plans

RUSSIA: Shtokman partners Gazprom, Statoil and Total might decide to only feed the gas from the field into pipelines to the European marked and drop the plans to produce liquefied natural gas (LNG).

The partners in Shtokman Development will have a meeting in Switzerland on Friday where the future plans for the huge Barents Sea gas field will be discussed. The background is the latest dramatic changes in the gas prices and the shift in the US gas marked from import of LNG to more development of shale gas, according to BarentsObserver.

Gas marked analysts referred to by Financial Times says the changes in the marked situation could lead Gazprom, Statoil and Total to officially postpone the development of the field and also make them abandon the entire planned LNG-plant in Teriberka on the coast of the Kola Peninsula.

The gas from the Shtokman field will be sent onshore at Teriberka, but instead of building a huge LNG plant in Teriberka, the natural gas from the Shtokman-field will be sent by the planned pipeline from the Kola-coast and south towards the other Russian pipelines for natural gas. Also, the planned Nord Stream pipeline from the Gulf of Finland to Greifswald in Germany will be fed by gas from Shtokman.

Talking to Financial Times, Jonathan Stern, head of gas research at the Oxford Institute of Energy Studies, said Shtokman LNG could not compete economically with US shale gas at current prices.