ROME (Bloomberg) -- Royal Dutch Shell Plc. and partners told Russian President Vladimir Putin that developing Arctic gas fields big enough to supply global demand for a decade may cost “several hundred billion” dollars.

Shell Chief Executive Officer Jeroen van der Veer and CEOs from Dutch companies including gas trader GasTerra BV said the Yamal peninsula and Kara Sea may hold over 30 trillion cubic meters of gas, more than the proved reserves of OAO Gazprom. Development of the region could take 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, would work in the region with state-run Gazprom, which needs the fuel from Yamal to replace dwindling production at existing fields.
“Preliminary estimates of total investments for developing the gas and oil fields and supporting infrastructure are of the order of several hundred billion” dollars, the proposal says under the headline, “Yamal Peninsula & Kara Sea.” The presentation includes plans for building artificial islands and “barge-based floating” liquefied natural gas facilities.
Gazprom, the world’s biggest gas producer and Russia’s export monopoly, meets a quarter of Europe’s demand for the fuel. The Moscow-based company’s three major fields -- Urengoi, Yamburg, and Medvezhye -- are in decline. Shell was forced to sell control of the Sakhalin-2 project to Gazprom after Russian regulators threatened to halt the development in the Far East.
--------------------------------------- Needing Yamal
“Gazprom needs Yamal, and it needs it in the early years of the next decade to keep production where it is today,” Jonathan Stern, director of gas research at the Oxford Institute of Energy Studies, said Tuesday by phone from London. Yamal is “definitely” the most difficult onshore gas region in the world. If Gazprom fails, its output could fall, Stern said.
Gazprom Deputy CEO Alexander Medvedev declined to comment on the Dutch plan during a meeting with reporters in Moscow Tuesday. The company’s press office didn’t return calls seeking comment.
“We regard the contents of the discussion between Jeroen van der Veer and President Putin as confidential and will therefore not comment further,” Shell spokeswoman Saskia Kapinga said by phone from London.
Gazprom has sought the help of international oil and gas producers to develop fields in harder to reach regions. The company picked France’s Total SA and StatoilHydro ASA of Norway for Shtokman, a deposit in the Arctic Ocean with enough gas to supply the world for more than a year.