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EUobserver.com: Russia snubs European firms in Arctic gas project

Gazprom story

The EU’s plans for closer integration with Russia via Arctic energy projects have been dealt a blow (Photo: Gazprom)

09.10.2006 – 17:38 CET | By Andrew Rettman

Russia’s Gazprom says it will develop the Shtokman gas field in the Barents Sea alone, which could deal a blow to Norway’s plan to help integrate Russia with Europe via major Arctic energy projects and dash the plans of major European firms.

“Gazprom will develop the giant Shtokman gas deposit off Russia’s Arctic shelf without foreign companies,” Alexei Miller, the energy giant’s CEO, told Russia Today TV on Monday (9 October), Russian state-owned news agency Ria Novosti reports.

“The European market is the number one for Gazprom,” Mr Miller said according to Reuters, which explains that Shtokman gas will now be piped into the Russian-German Baltic Gas pipeline instead of being liquefied and shipped to the US.

The statement brings to an end over a year’s worth of talks with European and US partners keen to help develop the massive, 3.2 trillion cubic metre gas field, leaving in the lurch Norway’s Statoil and Norsk Hydro, France’s Total and the US’ Chevron and Conoco Philips.

It also represents a blow against Norway’s policy of the “High North” and the EU’s own “Northern Dimension” draft treaty, both of which envisage closer integration with Russia via Arctic energy projects.

“Close cooperation between Norway and Russia in this region could be in the interests of both these countries and all of Europe,” Norway’s energy minister Odd Roger Enosken told EUobserver back in May.

But on Monday some senior Statoil representatives and diplomats in Norway’s foreign ministry found out about Gazprom’s decision via the media.

The surprise Shtokman move comes hot on the heels of Shell oil’s dispute over the Sakhalin oil and gas field in the Russian Far East.

The European Commission indicated last month it is very unhappy with the Kremlin’s decision to revoke environmental approval of the Sakhalin-2 oil and gas project led by Royal Dutch Shell, in a move which was seen as deliberately frustrating foreign competition on the Russian market.

© 2006 EUobserver, All rights reserved

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