Joint gas studies between Gazprom and Hydro

December 14, 2004, 17:00 CET

The chairman of the Board of OAO Gazprom, Alexey Miller, and Hydro president and CEO Eivind Reiten have signed a Memorandum of Understanding (MoU) in order to conduct a series of joint studies about gas projects.

Based on this agreement Gazprom and Hydro will continue to cooperate in developing the Shtokman gas field from reservoir to market. In particular, the parties will study the possibility of the Shtokman development based on Hydro’s Ormen Lange sub-sea technology, the LNG value chain as well as aspects of commercial cooperation, marketing aspects and financial analysis.

The companies will also study the possibility of Gazprom`s participation in oil- and gas field developments owned by Hydro, including Ormen Lange.

"Hydro sees this MoU as a continuation of our ongoing and long-term cooperation with Gazprom. This is one out of many steps in Hydro’s long-term commitment in Russia," Eivind Reiten said after signing the agreement.

"Gazprom believes that the signed Memorandum is another step on the way in developing the giant gas resources in the Barents Sea. Hydro has significant experience and technology in developing offshore oil- and gas fields. Uniting the competence between Gazprom and Hydro is a basis for a successful implementation of Gazprom`s large-scale plans in the Arctic shelf," Alexey Miller said after the signing.

In 2003 Hydro developed a concept study for the Shtokman field based on Hydro’s Ormen Lange sub-sea technology. This work resulted in an estimated cost-cut of approximately 30 per cent for the up-stream part, compared with earlier estimates.