RUSSIA signalled yesterday that Norway is the front- runner in the contest to find partners in the development of a gasfield that has enough fuel to supply Britain for 35 years.

Two Norwegian energy companies, Statoil and Norsk Hydro, are competing with two American groups, Chevron and ConocoPhillips, and Total, of France, for a slice of the world’s most challenging energy project: to produce gas 500km offshore in the Arctic, convert it into liquid and ship it to the United States.

Excitement over the Shtokmanovskoye gasfield project, one of the world’s biggest and a jewel in the crown of Gazprom, the Russian company, has sent shares in Norsk Hydro soaring, gaining almost 50 per cent in value since November in anticipation that the energy and metals group will be offered a share in the project.

Gazprom has indicated that it will choose two or three partners by April 15 to share the risk of Shtokman’s high cost and huge technological challenge.

Speaking in Oslo, Mikhail Fradkov, the Russian Prime Minister, said yesterday that the two Norwegian companies were “strong potential participants” and praised their technology and offshore expertise, as he toured Norsk Hydro’s Ormen Lange offshore gas development.

Shtokman will push the two countries to settle a longrunning maritime border dispute in the Barents Sea, a region believed to contain huge petroleum resources.

“We must intensify efforts to find a solution to the border issue,” Mr Fradkov said. The challenge of extracting gas offshore in Arctic conditions kept Shtokman, discovered 18 years ago, on the shelf. The huge 1,200 sq km gasfield, containing 110 trillion cubic feet of gas, is attracting Western companies with offshore expertise and liquefied natural gas technology, areas in which Gazprom is weak.

More than 120 wells and three or four offshore production platforms will be built in temperatures of -25C, with frequent hurricane-force winds and the danger of shifting ice floes.

Several pipelines in water depths of 300 metres will bring gas ashore on Russia’s Kola Peninsula, where it will be liquefied and loaded on to ships for export to American or European markets.

As important for Gazprom is access to markets, with the holy grail being gas exports to the United States, a prize of great political and commercial signficiance.

Both Chevron and Conoco are building liquefied natural gas terminals in the United States.

A piece of Ormen Lange is likely to find its way into Gazprom’s portfolio if Norsk Hydro is chosen because the Russian utility is demanding that partners not only contribute funds and know-how but also swap assets. Gazprom is anxious to build a commercial presence in Western European markets, most notably in Britain, by swapping gas assets with European gas producers.

In exchange for a piece of Shtokman, Statoil and Total are expected to offer part of Snohvit, a Norwegian offshore gasfield that is the most northerly gas development and may be a technological model for Shtokman.

Separately, Russian press reports suggested yesterday that Gazprom was hoping to lift its European market share from 25 to 30 per cent by acquiring gas-storage facilities.

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