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Shtokman hopes for loans to start gas project

Shtokman hopes for loans to start gas project

The operator of the Shtokman natural gas field hopes most of the financing to develop the huge Arctic field will come from loans if the global credit crisis eases next year, Russian news agencies reported Monday.
Shtokman Development, controlled by Russia's Gazprom and co-owned by France's Total and Norway's StatoilHydro, is to start production at the Barents Sea field in 2013.
Its reserves are estimated to hold 3.8 trillion cubic meters of natural gas, which would make it the world's largest gas project in terms of output.
Shtokman Development head Yuri Komarov said he hopes the company will be able to borrow to finance the venture if the global credit crunch eases next year.
"The plan is for the partners to invest 30 percent, while 70 percent will come in loans," he was quoted as saying by RIA-Novosti.
The field is located deep underwater in some of the world's most treacherous conditions and the first stage of the project could cost US$15 billion alone.
Komarov said he couldn't estimate the project's final costs, but said it would be lucrative if oil prices range from $50 to $60 per barrel.
Russia is facing its worst economic crisis in a decade. Its economy is tightly linked to oil prices and next year's federal budget forecasts a $95 price for oil, however, last week crude oil hovered just above $40, down from a record-high $147 in July.