Page 11 - FSUOGM Week 40 2019

FSUOGM PROJECTS & COMPANIES FSUOGM
Irkutsk producer makes gas pact with Gazprom
RUSSIA
INK needs Gazprom’s help in monetising gas resources.
EASTERN Siberian oil and gas producer Irkutsk Oil (INK) is teaming up with state-owned Gaz- prom to develop resources in the Krasnoyarsk region.
The pair signed a memorandum of intent (MoI) on October 3, under which they will con- sider working together in the exploration, pro- duction, transportation, processing and sale of hydrocarbons at the Sobinskoye and Paiginskoye fields.
Gazprom operates Sobinskoye, while INK controls Paiginskoye. The neighbouring depos- its contain oil, gas and condensate, but the main focus of the partnership is gas production, indus- try sources told FSUOGM. Sobinskoye alone is estimated to contain 159bn cubic metres of C1+C2 gas, while Paiginskoye’s reserves have not been disclosed.
The partnership makes sense for several reasons. Sobinskoye and Paiginskoye are far removed from Gazprom’s main assets in Eastern Siberia – the Chayandinskoye field in Yakutia and the Kovyktinskoye field in Irkutsk – as well as INK’s main area of operations in Irkutsk. Developing the fields together should therefore help save on infra- structure costs.
Gazprom is eager to boost gas production in Eastern Siberia to support its ongoing gasifica- tion programme in the area as well as increase exports to China. The 38 bcm per year Power of Siberia pipeline to China is due to start up this December, fed with gas from Chayandinskoye and Kovyktinskoye. But Gazprom also needs resources to underpin construction of a second pipeline to the Chinese market through Mongo- lia. President Vladimir Putin ordered Gazprom head Alexei Miller to advance this plan during a meeting last month.
To date, INK has focused largely on oil devel- opment, producing around 180,000 barrels per day (bpd) of crude in 2018. It has largely been unable to monetise its gas resources because of
limited infrastructure and weak local demand. It plans to commission a petrochemical complex in 2023 to make use of impurities found in the gas, but it has limited options for commercialising the methane itself.
Whereas INK will gain from access to Gaz- prom’s gas sales ability and its experience in gas production, Gazprom will gain from INK’s track record in oil development.
As with many other Eastern Siberian fields, gas from Sobinskoye is rich in helium, with a content of almost 0.6%. Gazprom is therefore considering options for facilities to remove this helium and sell it, the sources said.
In related news, INK has just handed a con- tract to Bentec, a subsidiary of UK engineering group KCA Deutag, for the supply of seven land rigs. Bentec said in a statement on October 2 that it would manufacture seven latest-genera- tion 320-tonne cluster slider rigs for the Russian company.
The rigs will be built at Bentec’s facilities in Tyumen, Western Siberia, using some high-tech components supplied from Germany. The first three rigs will be delivered in 2020, with the rest arriving the following year.
“We are proud to announce this new contract with INK-Service Group,” Bentec CEO Dirk Schulze said of the deal. “We know the Russian market very well and our innovative drilling rigs are ideally suited to the extreme weather Russia experiences.”
INK, one of Russia’s largest independent oil and gas producers, is under the majority con- trol of businessman Nikolai Buynov. But it also counts the European Bank for Reconstruction and Development (EBRD) and Goldman Sachs among its investors. The company has seen rapid growth over the past decade, boosting output by around 20 times. But it has not disclosed its current reserves, or provided any guidance on future production, leaving it unclear whether this growth will continue. ™
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