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. Last Updated: 07/27/2016

Total, Sumitomo Sign Up for Arctic Development

Gazprom said on Wednesday that French oil major Total and Japan's Sumitomo would join the list of firms that want to help it develop a giant Barents Sea gas field.

That would raise to nine the list of firms who have signed memorandums of understanding with Gazprom for developing the Shtokman field, said Igor Meshcherin, Gazprom's projects expertise department head.

Norway's Statoil and Hydro signed merorandums on Monday, joining Royal Dutch/Shell, ExxonMobil, ConocoPhillips, Chevron and Sempra.

Gazprom has said it would chose two to three partners by the end of this year to help it develop one of the world's largest gas fields, which has reserves of 3.2 trillion cubic meters.

Meshcherin added that he expected to be able to announce more news next month.

"I don't know if we will identify partners then, or maybe there will be a shortlist first," he said.

He said the northeast of the United States was Shtokman's prime market.

Meshcherin said Sempra was keen to secure supplies and was offering Gazprom 51 percent in a joint venture focused on trading and marketing Shtokman liquefied natural gas in the U.S. market.

Conoco was also offering a similar deal, he said, although he declined to give details.

The two Norwegian firms, which sent delegations to Russia with Prime Minister Kjell Magne Bondevik, have also submitted proposals to Gazprom, while Shell plans to do so in the near future.

Last year, Gazprom also signed a memorandum of understanding with PetroCanada about building a $1.2 billion LNG plant at Ust-Luga on the Baltic Sea, with capacity of 5 million to 7 million tons per year.

Meshcherin said Gazprom was still deciding whether to go ahead with the project, which it would want to bring to fruition more quickly than the much larger Shtokman.

Meshcherin also said Gazprom was proposing the government impose a floating export tariff on LNG, which he said would remove the need for a production-sharing agreement for Shtokman, Interfax reported.

"The existing legislation allows us, but does not oblige us, to use a production sharing agreement," Meshcherin said.

He said the government had set the tariff at $49 per 1,000 cubic meters, but Gazprom is working out a tariff which fluctuates with market prices, in a similar way to tariffs on oil exports.