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SPV

Shtokman project development: phase 1

Assets up to the challenges

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SPV

Shtokman : A World class project

Huge IGIP : 3.7 Tcm equivalent to 1.3

years of world gas consumption

today

A need for Russia

A need for European gas market

A need for US LNG markets

But also paving the way to develop

the Oil and Gas reserves in Arctic

A world class Russian project under the spotlight of the World energy sector

2

Security through a worldwide market withdiversified supply

FSU

1015

+275

740

Asia-Oceania

570

-150

720

Middle East

810

+270

540

Africa

390

+250

140

Europe235

-525

760

South America

220

+20

200

Production/Consumption (2020) = 4000 Bcm Trade = 815 Bcm

Production

Consumption

Exports

Imports

760

900

-140

North America

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SPV

A World class project

Huge IGIP : 3.7 Tcm equivalent to 1.3

years of world gas consumption today

A need for Russia

A need for European gas market

A need for US LNG markets

But also paving the way to developthe Oil and Gas reserves in Arctic

A world class Russian project under the spotlight of the World energy sector

2

Security through a worldwide market withdiversified supply

FSU

1015

+275

740

Asia-Oceania

570

-150

720

Middle East

810

+270

540

Africa

390

+250

140

Europe

235

-525

760

South America

220

+20

200

Production/Consumption (2020) = 4000 Bcm Trade = 815 Bcm

Production

Consumption

Exports

Imports

760

900

-140

North America

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SPV

Brief field characteristics

The field was discovered in 1988

Seven exploratory/delineation wells havebeen drilled

Extension of field 4836 km

4 producing formations J0, J1, J2 and J3

Offshore distance is about 600 km

Sea depth in the field area is up to 350 m

Gas in Place (C1+C2): 3,819 bn m3

Condensate in Place: 36,9 m metric tons

Good petrophysical characteristics

low CGR Low CO2 content No H2S

Top J0 depth map

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SPV

Main principles of Shtokman Development

Floater

Onshore Installations

Offshore trunk line

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Shtokman field

Vyborg

Teriberka

Greisfald

Barents sea

North sea

Russia

LNG

Gas pipe

Shtokman field

Vyborg

Teriberka

Greisfald

Barents sea

North sea

Russia

LNG

Gas pipe

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Shtokman Field : A 3 phase development

Number of floaters: 3Number of subsea production complexes , each for 8 wel ls: 7

Number of 42 600 Km trunk l ines: 3

Phase 3

Phase 2

Phase 1

Template

Template

Template

Template

Template

TemplateTemplate

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Shtokman Field : A 3 phase development

Phase 1Phase 2

Phase 3

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The Shtokman Phase 1 Project Partners

The Framework Agreement for Cooperation in theDevelopment of the First Phase of the Shtokman GasCondensate Field was signed with TOTAL Company on 13June 2007

The Framework Agreement for Cooperation in theDevelopment of the First Phase of the Shtokman GasCondensate Field was signed with StatoilHydro Company on25 October 2007

SEVMORNEFTEGAZ Ltd

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Framework for the phase 1 of the Shtokmandevelopment

Scope

Organize, design, finance, construct and operate the Shtokman phase 1 development

Include: Offshore development, Offshore trunk line, Onshore receiving facilities, LNGplant (7.5Mty), and all associated facilities ( logistics etc..) including the ones necessary

for the subsequent phases. Not including: LNG shipping, onshore pipe to Vyborg

Production plateau of 23.7 Gm3/year ( i.e 70 MM cm/d # 400 000 bepd equivalent) (7,5Mty liquefied, 5 % gas for local market, the rest piped to North Stream network)

Creation of an Offshore Company with a branch in Russia (Special PurposeVehicle (SPV))

Participating interests in SPV:

Gazprom 51%

Total 25 %

StatoilHydro 24%

Shtokman field

Vyborg

Teriberka

Greisfald

Barents sea

North sea

Russia

LNG

Gas pipe

Shtokman field

Vyborg

Teriberka

Greisfald

Barents sea

North sea

Russia

LNG

Gas pipe

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Framework for the phase 1 of the Shtokman development

A single integrated dedicated Project Team Gazprom / Total / StatoilHydro

Synergy of Russian and European cutting-edge skills and technologies Sharing of knowledge and resources optimization

Key Dates for Phase 1: FEED Contract award: November/December 2007

Final Investment Decision: 2009 Start gas export by pipeline: 2013

Start of LNG exports: 2014

CAPEX about 15 G$

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Upstream

3 sub sea templates (20 wells) and associated flow linesand risers

Floating processing & ice-resistant platform (FPU, SPARor similar): gas & condensate dehydration, compression,utilities, living quarter (Disconnectable?)

One 42, dry 2 phase transport to shore via 550 kmsubsea pipeline

Ice and Iceberg management

Onshore plant near Murmansk - Teriberka

Receiving facilities, Gas treatment facilities

LNG plant : Gas liquefaction (7.5 Mt/year)

LNG Gas & condensate storage

Harbor & export facilities (LNG & Condensate)

All others facilities required to operate the Offshore andonshore installations

Phase 1 development: General arrangement summary

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A world class project with extraordinarychallenges in a frontier environmental context

Technical challenges

Planning and costs challenges

Organization and human challenges

Shtokman phase 1 development: Main Challenges

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A challenging environmental context

Arctic conditions, Barents sea with extremeweather conditions:

Design impact

Operating conditions

Construction windows limited

At the eve of a huge development inMurmansk area . The project shall beintegrated in the local context

Essential to preserve the environment in asensitive ecosystem

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Technical Challenges : Offshore Facilities

Topsides operating weight up to 45 000 tons ( production is 400 000 Bepd equivalent !)

Two (2) main concepts - to be ice resistant and disconnectable - under preliminary designand evaluation

HSE and Operational aspects

Sail ConsolidatedLayer

Keel

0

- 15

- 30

15

0 50 100 150 200

Ridgee

levation(m)

Ridge width (m)

Keel

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Technical challenges : Export pipeline to shore

The Dry 2 Phase transport challenges:

Offshore riser arrangement (high flow rates)

Large diameter and high design pressure pipeline

Liquid Hold-up in the range 30 70 MSm3/d to be managed in operations

Size of the 2 phase slug catcher onshore to be optimized . Constructability and shore approach difficulties

Optimization between pipe diameter / Inlet & outlet pressure / maximum liquid hold-up /operating conditions (minimum maximum flow-rates)

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Technical challenges : LNG plant: specific site conditions

Design capacity = 7.5 Mt/year

Main aspects for optimization anddesign:

Arctic climate

Winterisation

Construction constraints (stick built /modular)

Appropriate design: number of trains,driver selection, cooling media,reservation for next phases..

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Technical challenges : Associated facilities - Logistics

600 Km offshore from Murmansk

Supporting facilities for onshore andoffshore installation

Thousands of construction workers duringthe construction peak activities

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Planning and Costs Challenges

Tight schedule

FEED in 2007

FID in 2009 ( based on EPC tenders analysis)

First pipe gas in 2013,

First LNG in 2014

Budget: Keep budget under control and always maintain a high level of

competitiveness

Need Innovative and robust solutions in Planning and Cost optimization

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Organization and Human Challenges

An efficient project organization with proper delegation of

authorities already set up

An organization with a strongly motivated team, success oriented

3 different but complementary cultures being one of the project

asset

One of our most important challenge

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Assets up to Challenges for a new frontier project

The Shtokman project has some considerable assets to

balance its challenges

Gazprom strong leadership

The project partners - all have a strong expertise

Benefit of Russian, French and Norwegian culture

Expertise already developed within Russian institutes

High level of education allowing access to locally qualified resourcesA Russian project benefiting of Russian industrial network, local

content and Regional expertise and experience.

International contractors eager to join this new frontier project

Project assets balance the project challenges

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One of the top world class project with exciting challenges

balanced by robust assets

A challenging project to be developed with a Russian,

Regional and International cooperation

A Russian project with a world class partnership to :

Increase gas delivery and Improve the energy security to the worldmarket by 2013.

Pave the way for an efficient development of the Arctic Shelfwiththe highest standards in terms of Safety Heath andEnvironment.

The Shtokman Project phase 1 , in brief ..The Shtokman Project phase 1 , in brief ..

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SPV

Shtokman project development: phase 1

A project with assets up to the challenges

Thank you

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Technical challenges

Ice conditions & Iceberg Management In 2003, more than 15 icebergs have been observed close to Shtokman, 2 of them weighting

more than 3 millions tons

=> Disconnectable floating support ?

Ice conditions => Offshore Facilities have to be ice resistant