Putin Looks for Yamal Partners

Prime Minister Vladimir Putin will help Gazprom and Novatek find a foreign partner to develop gas fields on the Yamal Peninsula, a government source said.

Putin will meet with the heads of several of the world’s biggest energy companies Thursday in Salekhard, Yamal, to discuss the gas fields. Gazprom and Novatek have licenses for the fields, but Putin is meeting with foreign companies that want to participate, the source said.

Attending the meeting will be executives from France’s Total and GDF Suez, Norway’s StatoilHydro, British-Dutch Shell, Japan’s Mitsui and Mitsubishi, American firms ExxonMobil and ConocoPhillips, Germany’s E.On, Korea’s Kogas, Malaysia’s Petronas and Canadian Sancor Energy, the source said. Spokespeople for Shell, Statoil, Exxon and E.On confirmed the visit to Salekhard, while the other firms declined to comment. A government spokesman would not reveal the companies in attendance, and Gazprom and Novatek declined to comment.

For foreigners, Yamal means new resources — huge even by Russian standards, an Energy Ministry official said.

“We are looking for the possibility to expand our business in Russia,” said Mari Dotterud, a spokeswoman for StatoilHydro. “We want to offer our experience in developing gas deposits in the Arctic, and in this way Yamal is a priority for us.”

Spokespeople from the other companies spoke along similar lines, but no one was willing to say concretely what they expected from the visit with Putin.

The situation is reminiscent of the development of the Sakhalin fields, said Mikhail Korchemkin, director of East European Gas Analysis. When the project is ready, investors may find themselves in such a condition that they decide to get rid of their stakes, he said.

The development of Yamal is one of the most difficult and most lucrative programs Gazprom has, with a cost of almost $100 billion. The railroad to the field alone has been under construction for almost 20 years, and the parts that were built in Soviet times have deteriorated because of the harsh winters.

To work in Yamal means to drill through frozen mud, gas industry workers say. The drilling liquid and gas from the well are warm and melt the frozen ground, but this negatively affects the stability of the construction, and special materials and technologies are needed.

No one the necessary technology, but the experience of world players will help, a government source said.

It has not yet been determined how the foreign firms might develop the fields, but it could be similar to the development of the Shtokman field, the source said. There, Gazprom has the license for development, while a joint venture with Total and Statoil is doing the drilling, building a liquefied natural gas factory that it will own for 25 years.

Novatek got involved with Yamal only this year, after it took control of Yamal SPG, which was owned by gas trader Gennady Timchenko. Gazprom owns the neighboring North Tambeiskoye field and the South Tambeiskoye field, and the company is discussing their joint development and the possibility of building a liquefied natural gas factory.