Map of Barents Sea gas fields

The EU, like the U.S., has a vested interest in diversifying its energy sources, while Gazprom has a strong interest in quickly expanding into markets where its network of pipelines currenly do not or cannot reach - namely, the U.S., India and China. While Gazprom continues planning trans-Siberian and Central Asian pipelines, the only way Gazprom can currently supply the voracious North American market is to liquify natural gas and ship it via LNG tankers to U.S. terminals.

LNG tanker

With yields from North Sea oil and gas fields reportedly dwindling, Gazprom is now directing the most important energy project in Europe, the Shtokman development in the Barents Sea. The BBC reported in January that Gazprom has partnered with a France-based multinational bank, Calyon, to raise the initial capital needed to start tapping the field by 2010.

Gas platform in the Barents Sea

Reuters reports this week that the field is estimated to hold "3.7 trillion cubic metres of gas, equivalent to 23.3 billion barrels of oil". The Reuters writer adds that there is no consensus among financial analysts as to how much capital will be needed to fully exploit this bonanza, with estimates varying widely from $12 to $34 billion dollars.

Barents Sea drilling rigs
Russia Blog has written previously about Russia's tremendous potential to become a major non-Middle East supplier to the U.S. and the need for greater Russian transparency to attract foreign investment. Since supplies from Canada, Alaska and the U.S. Outer Continental Shelf (assuming environmentalists don't continue blocking further offshore drilling) may not be sufficient to meet demand someday, the alternative to buying more oil and gas from Russia could be greater dependency on politically unstable West African suppliers and Venezuela.