Shell: Yamal gas could supply planet for decade

Royal Dutch Shell Plc and its partners said Russia's Yamal peninsula and Kara Sea may hold more than 30 trillion cubic meters of gas, enough to supply the world for a decade, in a plan presented in the Kremlin.

Shell Chief Executive Officer Jeroen van der Veer and his counterparts in Dutch companies, including gas trader GasTerra BV, told Russian President Vladimir Putin that development of the Arctic region may cost "several hundred billion" dollars and take more than 50 years, according to a slide presentation received from GasTerra.

Russia said a week ago it was "interested" in the proposal to develop the country's far northern peninsula. The Dutch energy companies, including Essent NV and Nederlandse Gasunie NV, plan to work in the region with state-run OAO Gazprom, which needs the fuel from Yamal to replace dwindling output at existing fields.

"Yamal is absolutely needed by Gazprom to offset the ongoing and relatively steep declines at its core fields in West Siberia," Ron Smith, head of equity research at Moscow's Alfa Bank, wrote in an e-mail to Bloomberg News. "It may well be that there is a role for them to play in Yamal's development," he said, referring to Shell.

Bloomberg News

(China Daily 11/23/2007 page16)