3 June 2011

Cooperation Agreement Executed by Shtokman Development and United Shipbuilding Corporation

Mr. A. Zagorovskiy, Chief Executive Officer of the Shtokman Development AG (SDAG) and Mr. R. Trotsenko, President of the Unified Shipbuilding Corporation (USC) signed the Cooperation Agreement on June 2, 2011 in Moscow.

According to the Agreement SDAG and USC acknowledge their intentions to cooperate to achieve maximum Russian content for phase 1 of the Integrated Development of the Shtokman Gas and Condensate Field. The Parties agreed to cooperate and exchange information to extend the list of the Project participants and scope of Russian content.

“Engagement of Russian enterprises in the Project and development of their engineering capabilities are among the SDAG priorities. The Shtokman Project realization will contribute to the development of industrial and service capacities of Russian industry, and we intend to join efforts with USC in this direction”, — underlined Mr. A. Zagorovskiy.

Mr. R. Trotsenko assessed that “execution of the Agreement confirms the intention of SDAG, as Contractor to assure maximum engagement of potential of Russian ship building companies in the Shtokman Project using their existing and newly build capacities. Their capacities could be called for to manufacture production vessels, subsea production complexes, support and service vessels for offshore fields”.

SDAG and USC agreed to organize within the Agreement the Working Team on engaging Russian enterprises in the Project. The Parties assume that extended Russian content in the Project would contribute to further upgrading of Russian industrial capacities.


Background:

Shtokman gas-condensate field is located in the central part of the Russian sector of the Barents Sea 550 km away from Kola Peninsula. By the explored reserves of natural gas Shtokman is now one of the largest fields in the world. Phase One of Shtokman field will be developed with annual production of 23.7 bn m3 of gas per year by Shtokman Development AG, a company created in February 2008, a joint project of three leading world companies Gazprom (51%), Total S.A. (25%) and Statoil ASA (24%).

Unified Shipbuilding Corporation (USC) is a 100% state equity corporation. United Shipbuilding Corporation is a open joint stock company in Russia which unite shipbuilding, repair and maintenance subsidiaries in western and northern Russia, and in the country’s Far East, to streamline civilian shipbuilding using military facilities. The corporation was established by a series of Presidential Decrees signed by President Vladimir Putin. According to the decree, the corporation has 3 subsidiaries: the Western Shipbuilding Center in St. Petersburg, the Northern Shipbuilding and Maintenance Center in Severodvinsk and the Far Eastern Shipbuilding and Maintenance Center in Vladivostok. The state owns 100% of the shares.

Currently, in the town of Bolshoy Kamen (a joint project between USC and South Korea’s Daewoo Shipbuilding and Marine Engineering) new shipyards are under construction planned to produce modern heavy-tonnage vessels, including LNG carriers, floating drilling rigs and production platform topsides for Gazprom and other companies.