UPDATE 1-Russia's Gazprom ups Shtokman reserves to 3.8 tcm

Thu Nov 15, 2007 10:47am EST

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(Updates details, background)

MOSCOW Nov 15 (Reuters) - Russia's Gazprom (GAZP.MM), the world's largest gas producer, said on Thursday it had revised up the reserves of its giant Shtokman gas field, which it plans to develop jointly with French and Norwegian partners.

Gazprom said the reserves of the Barents Sea offshore field were estimated at 3.8 trillion cubic metres (tcm) of gas and about 37 million tonnes of gas condensate, up from an earlier estimate of 3.7 tcm and over 31 million tonnes, respectively.

It also said it would by Dec. 20 set up a joint operating company with France's Total (TOTF.PA) and Norway's StatoilHydro (STL.OL), which Gazprom has chosen to help develop the $15-$20 billion first phase of the project.

The firm, in which Total and StatoilHydro will hold 25 and 24 percent respectively, will build and operate infrastructure at the gas deposits that could supply Europe and the United States with tanker-shipped liquefied natural gas (LNG).

The project is expected to start pumping 23-24 billion cubic metres of natural gas a year by 2013, while LNG deliveries are seen starting in 2014.

Gazprom also reiterated its view that the Exxon Mobil-led (XOM.N) Sakhalin-1 oil and gas project offshore Russia's Pacific coast should focus on gas supplies to the domestic market rather than building export pipelines to China or Japan.

The U.S. major, which reached a preliminary agreement with China in 2004 on annual supplies of 8 bcm of gas, has said it considered the Chinese direction to be the most attractive from the economic point of view.

Gazprom's influence in the region has grown significantly since last year, when the gas firm bought control of another major oil and gas project, Sakhalin-2.

Royal Dutch Shell (RDSa.L), which then led the project, and its Japanese partners, were obliged to sell after a campaign of criticism from Russian officials and threats of crippling licence withdrawals.

The Sakhalin-1 partners also include Russian state-controlled oil company Rosneft (ROSN.MM), India's ONGC (ONGC.BO) and the Japanese consortium Sodeco. (Reporting by Dmitry Zhdannikov and Tanya Mosolova, editing by Anthony Barker)

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