Oct. 6 (Bloomberg) -- Total SA, Europe’s third-largest oil company, and GDF Suez SA agreed to buy stakes in the Caspian Sea Khvalynskoye natural gas field from Kazakhstan’s state-run oil and gas company and help fund development.

Total agreed to purchase a 17 percent stake and GDF Suez will acquire 8 percent from KazMunaiGaz National Co., Total Chief Executive Officer Christophe de Margerie told reporters in Astana today. Russia’s OAO Lukoil owns 50 percent of the field.

“The gas will be sent to Russia,” de Margerie said, adding that the French companies will contribute about $1 billion of the $3.5 billion to $4 billion in estimated development costs. Output may start in 2016 and reach 8 billion cubic meters to 9 billion cubic meters a year, he said.

Lukoil, Russia’s largest oil producer, was developing the field with KazMunaiGaz, which until today’s agreement had held the other 50 percent. The field is in shallow waters near the Russian border and was in 2007 estimated by Lukoil to hold about 1.2 billion barrels of oil equivalent.

“Total will bring to the Khvalynskoye’s partners the company’s know-how in developing offshore projects,” the French company said in a statement. De Margerie was accompanying French President Nicolas Sarkozy on a visit to Kazakhstan, which holds about 15 percent of global uranium reserves and 3.2 percent of oil reserves.

Total is counting on four projects to support production growth starting in 2013 including the first phase of Kazakhstan’s Kashagan field, the biggest oil discovery in three decades. Partners include KazMunaiGaz, Eni SpA, ConocoPhillips, Exxon Mobil Corp., Inpex Holdings Inc. and Royal Dutch Shell Plc. It’s scheduled to start output in 2012.

Pipeline Projects

Separately, Vinci SA’s Entrepose Contracting SA and other companies signed an agreement in Astana to study construction of a pipeline from Kashagan to Baku in Azerbaijan. The contract may be worth 1.2 billion euros ($1.8 billion) for a group including Entrepose’s Spie Capag, Mannesmann France, Europipe GmbH, GTS and ArcelorMittal, according to a document provided by the French government.

The State Oil Co. of Azerbaijan, or Socar, and KazMunaiGaz agreed last week to examine building an oil pipeline across Azerbaijan to the Black Sea to carry fuel to global markets.

Paris-based GDF Suez today confirmed the acquisition in a separate statement. The utility earlier this year bought a 20 percent stake in the Absheron offshore block in Azerbaijan, in which Total and Socar each have a 40 percent.

To contact the reporter on this story: Francois de Beaupuy in Astana, Kazakhstan, at fdebeaupuy@bloomberg.net. Tara Patel in Paris at tpatel2@bloomberg.net

Last Updated: October 6, 2009 07:30 EDT