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12

Gazprom Will Proceed On Shtokman Field Anyway

Gazprom may delay some projects in response to weaker demand for gas and a tougher financial climate, but it expects to proceed with the giant Shtokman gas field early next year

Chief financial officer Andrei Kruglov said Tuesday that the company was still deciding on its plans for the year.

Key projects will go ahead as planned, however, including developments in the Yamal Peninsula and the Shtokman field, one of the largest gas fields in the world, which Gazprom is developing with France's Total and Norway's StatoilHydro.

"The investment decision will be made in the first quarter of 2010," Alexander Medvedev, deputy chief executive, said of Shtokman.

Shtokman is scheduled to start producing gas for export by pipeline in 2013 and as liquefied natural gas in 2014, according to a company presentation.

Medvedev added that, unusual for an oil and gas project, the Shtokman partners would incur considerable costs in advance of the decision on whether to proceed.

Usually the final investment decision is the point at which companies start to incur high costs.

A spokesman added that the state-controlled company would continue paying dividends in line with its policy, despite some fears that these could be cut because of lower oil and gas prices.

Author: Ksenia Kochneva