Russia's gas monopoly Gazprom today chose Norway's StatoilHydro to participate in a $30 billion gas project in the Barents Sea that is crucial for Russia if it is to meet rising demand for natural gas at home and abroad. StatoilHydro will take a 24 percent stake in an operating company that will plan, finance and build the first stage of the technically daunting Shtokman gas field, which could eventually produce up to 100 billion cubic meters of gas per year. Houston-based ConocoPhillips was a contender for the stake. France's Total has a 25 percent stake in the operating company, while state-controlled OAO Gazprom will keep 51 percent. Gazprom will also retain ownership of Shtokman's reserves, estimated at 3.7 trillion cubic meters of gas, the equivalent of six years of Russia's current annual production and enough to meet U.S. demand for six years. "We have gigantic reserves in the Barents Sea, and our Norwegian partners have good experience in carrying out gas production and transportation in the harsh climate conditions in the north," Gazprom CEO Alexei Miller said in a statement. Early today, President Vladimir Putin personally called Norwegian Prime Minister Jens Stoltenberg to inform him that StatoilHydro was chosen for the project — indicating the high degree of Kremlin involvement in the venture.... Michael Emerson, senior researcher at the Center for European Policy Studies in Brussels, said he did not rule out that unresolved geopolitical issues between Russia and the United States — such as Washington's plans to build a missile shield in Eastern Europe — influenced the decision...

Read the article Gazprom snubs ConocoPhillips in Barents Sea deal.

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