Project Delta: Pushing Toward Russia's New Energy Frontier

Cranes in the Sakhalin Port of Kholmsk. Along with Sakhalin-2, the Yamal fields are one of the great prizes in Russia's energy portfolio.
Royal dutch shell

Cranes in the Sakhalin Port of Kholmsk. Along with Sakhalin-2, the Yamal fields are one of the great prizes in Russia's energy portfolio.

Click to view previous image 1 of 5 Click to view next image

It is a great prize in Russia’s vast energy portfolio, estimated to hold over 30 trillion cubic meters of gas that could one day be the main source feeding hungry markets in Western Europe and at home.

But for decades, the Yamal peninsula and the Kara Sea that encircles it have been sitting mostly untouched, the region’s abundant energy riches the pride of Gazprom’s portfolio more in rhetoric than in action.

That will soon change, and Dutch energy companies are leading the race to get in on the game.

“Yamal is one of the most — if not the most — important development for the Russian gas  sector,” said Hans Van Lamoen, Royal Dutch Shell’s project manager for Russia, and Coordinator of the Project Delta Group. “It is a strategic top priority for Russia and for Europe and therefore for the Netherlands, considering the respective interests of ‘security of demand’ and ‘security of supply.’”

To push the case of Dutch companies, Van Lamoen helped found the Project Delta Group, which brings together 16 Dutch companies, including Shell, Gasunie, Gasterra and a host of civil and marine engineering firms, among others. In December 2008, Project Delta signed protocols with Gazprom outlining potential cooperation to develop Yamal and the surrounding Kara Sea.

But it all began about a year earlier, in November 2007 — several months after Shell and its Japanese partners finalized a deal to sell a majority stake in Sakhalin-2, the world’s largest integrated oil and gas project, to Gazprom after months of pressure by state environmental authorities.

The Project Delta proposal was first submitted during a visit to Moscow by Prime Minister Jan Peter Balkenende and a high-level business delegation, and it received subsequent political blessing from then-President Vladimir Putin, whose personal interest in state control over energy resources was a hallmark of his presidency.

“Definitely, it is believed that the protocol was signed as a gesture of goodwill after the Sakhalin-2 restructuring,” said Chris Weafer, chief strategist at UralSib, the Russian investment bank.

If, on the one hand, it was indeed a measure of goodwill from Moscow, then it was also just as much a sign of the lessons learned by Shell — and all foreign energy companies — in the wake of the murky struggle over Sakhalin-2.

“We are clearly dealing with strategic supplies. From a Russian point of view, the interest of the state is very clear,” said Van Lamoen. “If you look at Russia, playing its cards at the energy table … many of the steps of international cooperation tend to start at the state level.”

Thus the political blessing from then-president Putin — which, while necessary, may not be sufficient to ensure the involvement of the Netherlands’ main energy firms.

“It’s early days,” said Van Lamoen, noting that Yamal developments have just begun and will continue for many decades to come.

Gazprom has never signaled that it intends to take on a foreign partner to develop Yamal, though joint ventures with minority stakes awarded to international energy firms have become standard practice. Above all, foreign technological expertise is key.

“The Ministry of Gas in the past, and now Gazprom, have been very capable in developing the Russian gas sector over the past decades without direct foreign participation,” said Van Lamoen. “Yamal and the Kara Sea — it’s a different area. Here is a complex interface of land and water with fields situated onshore and offshore. Dutch companies are leaders in dealing with infrastructure developments at the interfaces of land and water and can therefore contribute extensive expertise and experience in Yamal, both as consortium partners and as project contractors.”

The Dutch have another leg up in the race to get in on Yamal’s development. Also in November 2007, Gasunie acquired a 9 percent stake in the Nord Stream pipeline, which will eventually send 55 billion cubic meters of gas directly to Europe through a Baltic Sea passage running from the Russian port of Vyborg to Greifswald in Germany.

Both in Europe and in Moscow, Nord Stream is touted as vital to both sides’ energy security, bypassing as it does pesky states like Ukraine, where politicized disputes over payments have prompted Gazprom to shut the taps, leading most recently to a severe energy crisis across Central and Eastern Europe in January of this year.

Yet what use is a pipeline if there is no gas to fill it?

“This is what energy security for Europe is all about. It’s not pipelines. It’s new projects, particularly Yamal,” said Weafer. “The EU is pushing to have its companies take part as a means of ensuring these projects will move forward.”

Yamal’s first project is just now due to get off the ground, decades after its discovery and seven years after Gazprom identified the region's gas fields as a strategic priority. Construction on infrastructure and pipelines has begun at Bovanenko, a large Yamal gas field that Gazprom has said could come online in 2011 and eventually produce a peak of 140bcm. Even before the global financial crisis hit, many analysts in Moscow called the 2011 target ambitious.

Cost is another question. Shell has estimated Yamal’s total development at more than $200 billion. Gazprom declined to comment, with a spokesman saying, “Negotiations between Gazprom and a group of Dutch companies regarding the Delta Project are still going on, and we cannot issue the details of it.”

“It’s a massive cost, but it needs to be done,” said Weafer. “The longer you leave it, the greater the risk of shortage.”

“In the current challenging economic climate, we can expect Gazprom to look critically at their business plans and possibly at some point delay or cut certain development plans and investments. But Yamal, with Bovanenko up front, is a top priority for which the development activities and investments are expected to proceed as planned,” said Van Lamoen.

“This is what energy security for Europe is all about. It’s new projects, particularly Yamal.”

For the past few decades, Gazprom has relied on fields in Western Siberia to produce the gas that keeps both Russian and European households warm and their industries running. As those fields reach their point of natural decline, the risk that Gazprom, for the first time in its history, will be unable to fulfill long-term supply contracts is becoming real.

“There is a greater sense of urgency,” said Weafer.

And that is where the Dutch hope they can jump in. Project Delta gives the companies an organized lobbying force, pushing for access to Russia’s new energy frontier.

Two members of the consortium are already working at the site, helping to build the infrastructure needed for production and transport to begin. One of those is Boskalis International, a leading marine engineering firm, which first began working in the region three years ago, before Project Delta was founded.

“This area is really tough to work with,” said Arie Smits, the firm’s area manager for Yamal. “Dutch companies can really contribute to this project.”

“Right now, there’s nothing there.”


Discussion

Comments

To post comments you must be registered. If your comment doesn't appear, contact us by using our web form. Read our comments policy here.



amine

I am thankful for the article.Really looking forward to read more.new year 2016 happy new year 2016 bonne année 2016

daborrelli

I have to search sites with relevant information on given topic and provide them to teacher our opinion and the article. MXQ Pro MXQ TV Box mxq amlogic mxq m10

daborrelli

I regard this post. This is additionally a normal post which I truly reviving investigating. wintel pro mxq firmware firefly pad

Alex John

Quickly this site will indisputably be famous among all blogging people, because of its fastidious articles or reviews. get more soundcloud views

discomani2

For better quality, youd have to take a gander at considerably more costly inkjets implied for expert picture takers. readmore Canon ImageClass MF8450c freeware download The new Canon MP130 driver Advanced extent incorporates a scope of programming components that empower clients to accomplish more with their imagination, readmore Epson Artisan 1430 driver support including channel impacts like fish eye and obscure foundation and red eye lessening. All shows incorporate Canons select My Image Garden propelled programming, readmore BMW Aplina D5 cost which transforms overlooked pictures into friends and family by taking photographs put away on a PC and sorting out Canon Pixma MP130 driver download into a timetable or schedule permitting clients to view all of them in one spot, arranging, make and share recollections. readmore LG ii Features

Alex John

If somebody wants expert take on the main topic of blogging next I advise him/her to go to this site, continue the fussy job. life insurance no medical exam

Alex John

It's amazing to visit again n again coming to your blogs the superb effort is here. get more soundcloud views

Alex John

These are actually wonderful some ideas in the blog. You have touched good quality points here. In whatever way continue writing. get a loan today

Alex John

I have sent your articles links to all my contacts and all of them liked it including me as well. business operations

chansara

I am unable to read articles online very often, but I'm glad I did today. This is very well written and your points are well-expressed. Please, don't ever stop writing. Survive In Bed

chansara

I am unable to read articles online very often, but I'm glad I did today. This is very well written and your points are well-expressed. Please, don't ever stop writing. Survive In Bed

chansara

This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information... the debts relief reviews

chansara

Thanks so much for sharing this awesome info! I am looking forward to see more postsby you! dianabol info

chansara

Wonderful blog! I found it while surfing around on Yahoo News. Do you have any suggestions on how to get listed in Yahoo News? I've been trying for a while but I never seem to get there! Appreciate it. legit dianabol

chansara

Thank you for taking the time to publish this information very useful! Obsession Phrases

chansara

That is the excellent mindset, nonetheless is just not help to make every sence whatsoever preaching about that mather. Virtually any method many thanks in addition to i had endeavor to promote your own article in to delicius nevertheless it is apparently a dilemma using your information sites can you please recheck the idea. thanks once more. Obsession Phrases Examples

liimo1

http://www.seattlewebdesign.co/ What a fantabulous post this has been. Never seen this kind of useful post. I am grateful to you and expect more number of posts like these. Thank you very much.

liimo1

Interesting topic for a blog. I have been searching the Internet for fun and came upon your website. Fabulous post. Thanks a ton for sharing your knowledge! It is great to see that some people still put in an effort into managing their websites. I'll be sure to check back again real soon. Seattle Web Design Company Services Designer Development

chansara

Thanks for providing recent updates regarding the concern, I look forward to read more. gym shoes

kapoor

Apple products are revered for its quality, precision and great design. SRSG started its operations as Apple technology partners in the year 1997.
Apple service center Delhi
ipad service center in Kolkata
Media office interiors
FM Phase 3

joulex

cool website buddy I am gona suggest this to all my list of contacts.natural makeup

alikhan

buy followers app I most likely appreciating each and every bit of it. It is an incredible site and decent impart. I need to much obliged. Great employment! You all do an incredible blog, and have some extraordinary substance. Keep doing awesome. buy real views on youtube

joulex

I have subscribed to your RSS which may do the trick? Have a great day!download free files

Albany

I'm empowered together with the surpassing plus preachy detailing for you to decorate such minimal timing. Bloxy Bonus

daborrelli

Good article, but it would be better if in future you can share more about this subject. Keep posting.firefly tablet usb c

joulex

Yamal, though joint ventures with minority stakes awarded to international energy firms have become standard practice. Above all, foreign technological expertise is key.istanbul dinner cruise

daborrelli

I seriously do experience the helpful write-up it is almost always essential and in addition well-informed. right after, Well, i will many thanks in direction of hobbies and interests an individual generate made up this data Wintel box Self balancing Scooter China

joulex

Gazprom outlining potential cooperation to develop Yamal and the surrounding Kara Sea.watch star wars the force awakens online

joulex

The event that you proceed with quality what you are serving at this moment with your blog.corelwtatour.com/rent-a-range-rover-in-dubai/

joulex

I have been deciding on a institutional move and this has helped me with one aspect.Black pussy

davidwarner491

Wow! What an eye opener this post has been for me. Very much appreciated, bookmarked, I can't wait for more! auto followers on facebook | 500 likes

kapoor

Maharishi Markandeshwar University, Mullana — Ambala, erstwhile known as Maharishi Markandeshwar Education Trust was founded with the objective of social, educational and economic upliftment of society in the year 1993, in the name of Lord Shiva's devotee, "Maharishi Markandeshwar Ji.
Diploma in Business Management
Engineering college in north India
Top MCA college in haryana
BBA college in haryana

Mbhavish

TransWorld Group is a reputed name for world-class Packers and Movers services in Bangalore. We are the frontrunner in offering relocation services in all leading cities of India.
Transworld Packers and Movers
Transworld Logistics Packers and Movers
Packers and Movers Marathahalli Bangalore
Packers And Movers Madhapur Hyderabad

joulex

These articles have got thorough discernment without unclear the readers. عقاري جدة دليل بروكر موقع شعلة

joulex

I wonderment why other professionals don't respond your website overmuch m happy I plant this.obtain more info

Albany

I'm just seriously able to obtain this blog plus have love looking through handy reports created listed here. A strategies of your article writer appeared to be magnificent, with thanks for any promote. tms saas

Stylezzz

CyberPowerPC prides itself for its extraordinary quality and changing in accordance with our client's inclination. Having the capacity to redo your Gaming PC under 500 whenever, clients at CyberPowerPC are guaranteed to be fulfilled from the minute they make their buy to the total of their gaming PC's lifespan. Through the choices we give to the nature of our items, CyberPowerPC remains as the world's number one decision for desktops in PC gaming.

Stylezzz

Every gaming desktop we review endures a standardized gauntlet of real-world and benchmark tests, in order to measure how each Gaming PCstacks up as both a gaming machine and as an everyday computer.

Jon Rub

Para analizar las diferentes opciones que existen en el mercado, la Organización de Consumidores y Usuarios (OCU) realizó un estudio en el que, gracias a la colaboración de voluntarias entre 31 y 70 años valoraba el pasado año la utilidad de todas esas mejores cremas antiarrugas

1 - 10 of 20
First | Prev. | 1 2 | Next | Last All

Report Inappropriate Comment




print



/business/country_supplement/russia_holland/
eng

Russia - Holland 2009 cover

Russia - Holland 2009

The Moscow Times is proud to announce published on 29th October 2009 the bilingual colour supplement Russia-Finland. This business publication is devoted to cooperation between the two countries in business and tourism and is published in partnership with the Embassy of Finland and the trade enterprise Visit Finland.


PDF Download PDF Version 9.17mb