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Russia's Barents Sea gas U-turn good for Merkel, but doubts remain: papers
AFP
MOSCOW
Petroleumworld.com 10 10 06
A decision by Russia to direct gas from the Barents Sea Shtokman field to Germany rather than North America looks like a gift from President Vladimir Putin to German Chancellor Angela Merkel as they meet Tuesday, Russian papers said.
"Germany is the priority: Gazprom will supply gas not to George Bush but Angela
Merkel," said the Kommersant daily in a headline.
A number of other papers also drew attention to the timing of Monday's stunning announcement by energy giant Gazprom. But they also pointed to potential problems ahead.
Gazprom said Monday it was no longer considering bids by Western energy majors to participate in developing the vast Shtokman field and that the gas would go not to North America but Europe, via a new pipeline to be built under the Baltic Sea to Germany.
Several papers said the decision looked like good news for Europe and particularly Germany, which fostered ties with Gazprom under Merkel's predecessor Gerhard Schroeder.
"Vladimir Putin... is bringing an unexpected gift for Chancellor Angela Merkel" when they meet in Dresden on Tuesday, Kommersant said.
Putin will propose "to make Germany Russia's principal energy partner in Europe" and will confirm "that Russia guarantees extra deliveries of gas to Germany amounting to 25-45 billion cubic metres per year for the next 50-70 years," Kommersant said.
The Vremya Novostei daily put it more starkly, running the headline: "Yankee go home! Gazprom has cut the gas from Shtokman to America".
Russia is convinced that its gas will "find a definite demand in Europe and... the development of the American market is not a priority," Vremya Novostei said, adding that political motivations underlay the announcement.
"The Kremlin is absolutely sure that the United States doesn't intend to approve Russia's accession to the WTO," Vremya Novostei said, referring to Russian hopes that Washington might give its crucial assent this month to Russian membership of the World Trade Organisation.
But newspapers also questioned the feasibility of Gazprom developing Shtokman using only foreign subcontractors rather than full-fledged partners.
Kommersant quoted a source close to the Norwegian hopefuls to join the project, Statoil and Norsk Hydro, who pointed out that Gazprom had yet to develop a single offshore deposit and predicted that the production target date of 2011 would slip.
"You can't buy the technology, you have to develop it," the unnamed source told Kommersant.
Kommersant also quoted representatives of the Norwegian companies as saying that without full partnership, they would not be interested in contributing their expertise.
The Vedomosti business paper quoted an unnamed manager within Gazprom as saying the company was not up to going it alone.
"The development of Shtokman will cost no less than 40 to 50 billion dollars (32 to 40 billion euros) and to take that on without a partner is too risky," the manager said.
"It would be necessary to draw huge amounts of credit, and Gazprom does not have the necessary technology," he said.
Even if Gazprom can manage on its own, "it's unlikely that Shtokman can come on line in 2011-2012 as planned," the Gazprom manager said.
AFP 100948 GMT 10 06
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