Japan nuke disaster can trigger Shtokman investment

Gazprom, Statoil and Total have all maintained over the last year that an investment decision on developing the Shtokman natural gas field in the Barents Sea will be taken in March this year. Now, Gazprom director Alexander Medvedev says next board meeting of Shtokman Development AG first will take place in April.

The world’s energy market is in a rather chaotic week as the catastrophic situation at the Fukushima nuclear power plant in Japan is still under development. EU Energy ministers met in Brussels yesterday to discuss the safety of European nuclear plants, and Germany says their old nuclear plants can be closed earlier than expected. Even Russia’s Prime Minister Vladimir Putin has ordered a review of all plans for construction of new nuclear power plants, as reported by BarentsObserver on Tuesday.

What is clear is that Japan needs new sources of energy as several of their nuclear electricity generating units are badly affected by the earthquakes and tsunami.

Japan and Russia are not closed allies disputing the Kuril Islands, but on Monday Russia offered to ship over extra liquefied natural gas (LNG) from the Sakhalin II project in the Far East.

An expert on business and energy cooperation in the Barents Region says the dramatic situation in Japan can influence energy production also in the high north.

- It might very well be that the current changes in the energy situation in Japan could influence the decision on investment for the Shtokman LNG project, says Harald Sørensen with the Norwegian Barents Secretariat. Sørensen is working with Norwegian – Russian business, energy and shipping cooperation.

- Japan needs new energy resources and LNG is the quickest option, Sørensen says. He also points to the ongoing nuclear debate in Europe. – If more European countries follow Germany’s example to close down older nuclear power plants earlier than previously planned, natural gas from Russia could replace nuclear energy, says Harald Sørensen.

Read also: Shtokman will come with LNG part

Russia is currently building the North Stream pipeline from Vyborg area west of St. Petersburg to Greifswald in Germany. Parts of the Shtokman gas will be sent by a new pipeline from the Kola Peninsula to North Stream.

Gazprom Deputy Chief Executive Officer Aleksandr Medvedev told Bloomberg on Tuesday that the board meeting to take a decision on whether to proceed with the Barents Sea project will take place in April, and not in March as earlier announced.

First a decision on the pipeline part of the project will be taken. The LNG part of Shtokman will be decided later, liekly by the end of 2011.

Read all BarentsObserver articles on the Shtokman project

Harald Sørensen says Shtokman LNG can be shipped either around the world in traditional LNG tankers or new-built ice-classed tankers can take the shortcut from the coast of the Kola Peninsula along the Northern Sea Route directly to Japan.