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Yamal: second wind for Gazprom

When "Gazprom" named figures of the gas production till 2020, many analysts sounded the alarm - the planned volumes of gas may not be enough for Europe and Russia, which will only increase consumption of the “blue fuel”.

When "Gazprom" named figures of the gas production till 2020, many analysts sounded the alarm - the planned volumes of gas may not be enough for Europe and Russia, which will only increase consumption of the “blue fuel”. According to Gazprom’s data, the company plans to maintain gas production at the level of 560 billion cubic meters a year till 2010; then the production volume will reach 580-590 bln cu m in 2020, and 610-630 bln cu m by 2030. Experts say that Gazprom, with its declining gas production of old deposits, has to make the best efforts developing the shelf, to start gas production in Sakhalin and, first of all, to develop Yamal gas fields.

According to the plan of the company, at the second stage of its development from 2006 to 2010 the company’s management intends to stabilize volumes of geological exploration works with the reserve replacement rate of 100 percent. Up to 2010 the emphasis will be put on the recruitment rate, and the expanded reproduction of gas reserves will be launched in 2011 within the framework of this Program. It will lead to considerable year-on-year increase of gas reserves over volumes of production. Yamal projects are supposed to become a basis of such a spurt.

«The comparative analysis of our possibilities has shown, that the most prospective project is the development of the unique gas resources of Yamal peninsula», Gazprom CEO Alexey Miller declared, adding that “There is no alternative to Yamal as the region where the new volumes of this valuable fuel will be produced». The Yamal peninsula has 10 billion cubic meters of developed reserves and its resources are estimated at 22 trillion cubic meters. The peninsula’s transformation into a large gas producing area will allow increasing gas production of Yamal up to 180 – 200 billion cubic meters a year by 2030.

The basis of the new spurt became “The feasibility study of investments into Bovanenkovskoe and Kharaseveyskoe gas condensate fields development and the gas transportation in Yamal peninsula”, developed in VNIPIgazdobycha, Gazprom gas production subsidiary. According to the paper, Bovanenkovskoe gas field, named by the company’s management the foreground one in the strategy of the company, will head the list of new gas giants. The planned gas production volume of Bovanenkovskoe gas field is estimated at 115 bln cu m a year. In the long term the gas production planned volume will reach 140 bln cu m a year. Currently the construction of Bovanenkovo – Ukhta pipelines is in active progress. The operator of Bovanenkovskoe oil and gas condensate field is to be Nadymgazprom, a 100% Gazprom exploration arm, which is the customer of the construction of the field facilities. JSC Yamalgazinvest is likely to be the customer of the construction of gas transportation system.

The priority project is constructed very quickly: Burgaz (a drilling unit of Gazprom), Nadymgazprom and TumenNIIgiprogaz developed the program of creation of the drilling capacities in Yamal peninsula for Bovanenkovskoe gas field development, Burgaz general director Andrey Rossinsky said.

The second largest gas field, providing the future of Yamal, will become Kharasaveyskoe gas field. According to Gazprom’s Deputy CEO Alexander Ananenkov, the gas production of the field is to be launched in 2014, while the necessity of investments into its development will be analyzed in 2011. Conceivably they will amount to $20 billion. The gas field has the most favorable prospects. It can be assumed that Gazprom may try to begin a scale production of LNG in Yamal. The truth is that the gas monopoly has not much to boast about producing large volumes of LNG, therefore the construction of such plant in Yamal will allow testing the basic variants of the gas liquefying nearby the site of the gas production. Besides, Yamal is penetrated by pipelines and has an access to the sea that will allow to transport Gazprom’s LNG by ice-breaking tankers. It seems that Kharasaveyskoe gas field will become a basis for the LNG plant construction since 2011 – 2014 Gazprom will place priorities between natural and liquefied natural gas.

One should note also the interest of foreign partners in the development of Yamal gas fields. It appears that Italian energy giant ENI SpA, the old partner of Gazprom Italian ENI will show its interest. The planned volume of Italian investments is impressive: about $10 billion at the first stage of the peninsula development. British oil major BP also doesn’t hide its willingness to participate in the Yamal operations, as it sees in them a good alternative to the development of the gas fields in Alaska.
It should be noted that Gazprom will get not only the investments but also an interest in the gas fields of its foreign rivals.

These gas fields can be called “the Yamal second wind” as it will be they which will produce about half of all Russian gas. The development of the peninsula gas fields, firstly gives the opportunity to increase the gas production volumes; secondly it gives an additional time to prepare for “the third wave” — the development of the shelf zone of the Kara Sea, experts say.
Potential reserves of the Yamal peninsula and the shelf, with 11 already proven gas fields and 15 oil and gas condensate fields are estimated at 50.5 trillion cubic meters. However, now only 12-13 trillion cubic meters of gas are produced in Yamal, which means that the peninsula and the Kara sea gas reserves will be enough up to the end of the century.

Author: Alexander Darmin

Source : Neftegaz.RU Magazine