This is a major blow to some of the world’s leading oil and gas companies that had been short-listed for the gas project, including Norway’s Statoil and Hydro, Conoco Phillips and Chevron of the US and France’s Total.

Gazprom was going to choose two or three partners from the shortlist for the Shtokman consortium. The members of the consortium were to be announced in the first quarter of this year, but Gazprom postponed the announcement.

Viktor Khristenko, the Russian Minister for Industry and Energy, said on 27 September that the Shtokman shortlist remained unchanged. He said the delay was necessitated by the need to distribute risks and ensure compliance with environmental standards. Khristenko also said the delay would not affect the project.

Yet Gazprom announced on Monday that the Stokman project would go ahead without international participation. “Gazprom will own 100% of it,” the company said in its press release. According to Gazprom CEO Alexei Miller, Gazprom had been considering the possibility of giving a 49 percent stake in the project to foreign partners but they had failed to provide sufficient assets.

Gazprom will use advanced technology and technical solutions for the Shtokman project, including for the production of liquefied natural gas. It will invite international companies as contractors, paying particular attention to compliance with time schedules and budgets. This will ensure the safety of Russia’s long-term gas supplies to Europe, at the same time underlining the importance of the European market for Gazprom, Miller said.

In terms of funding the project, Gazprom should have no problems, says Dmitry Mangilev, at Prospekt investment consultants. The company could take significant loans easily, he said. But it is unclear how Gazprom will construct this complex offshore gas field without sufficient experience.

Gazprom’s Executive Board also decided on Monday that the Shtokman gas would be exported to Europe through the North European Gas Pipeline (NEGP). Earlier the company planned to use gas from the Yuzhno-Russkoye field in Siberia for the NEGP project.

The Stokman gas condensate field, with reserves of about 3.7 trillion cubic meters of gas, is located in the central part of the Russian shelf sector of the Barents Sea. The license for the field is held by Sevmorneftegaz. The Shtokman project had been valued at over $10 billion, but Deputy CEO Alexander Ryazanov said on 4 April that between $12 billion and $14 billion were needed for the first stage of the project.