Page 11 - FSUOGM Week 33 2019

FSUOGM POLICY FSUOGM
Gazprom seeks state aid for Baltic gas hub
RUSSIA
Gazprom is paired
in the venture with a company af liated with a Kremlin ally.
RUSSIA’S Gazprom has reportedly asked for government support to develop major gas pro- cessing and petrochemical projects on the Baltic Sea.
Company head Alexei Miller requested in a letter to Prime Minister Dmitry Medvedev that the projects be given the status of “having national importance to the economy”. He also asked that the supervisory board of state devel- opment bank VEB be instructed to discuss nancing aid.
Gazprom had been working with Royal Dutch Shell to develop a 10mn tonne per year (tpy) LNG export terminal at the Baltic port of Ust-Luga, but abandoned this plan earlier this year in favour of a larger integrated processing complex. Partnered with RusGazDobycha, a company affiliated with Kremlin ally Arkady Rotenburg, Gazprom took a nal investment decision (FID) on constructing a hub at Ust- Luga capable of annually processing 45bn cubic metres of natural gas into 20 bcm of treated gas, 13mn tonnes of LNG, 4mn tonnes of ethane and
more than 2.2mn tonnes of LPG.
e ethane is expected to be used at a nearby
petrochemical plant that RusGazDobycha will develop on its own. is facility will produce 3mn tonnes of ethylene and 3mn tonnes of poly- ethylene, according to Miller’s letter.
Both projects are slated to be online in 2023- 2024. According to Gazprom, the gas process- ing and LNG complex should cost RUB700bn ($10.5bn) to build. e investment required for the petrochemical site has not been disclosed. However, a project with half its capacity that pet- rochemicals giant Sibur is developing in the Far East is projected to cost up to $9bn.
Shell pulled out of Gazprom’s Baltic plans a er changes to their scope earlier this year and allegedly because of the involvement of Roten- burg, who has been included in Washington’s sanctions blacklist beause of his close ties to President Vladimir Putin. Gazprom is report- edly in talks with Germany’s Linde to supply liquefaction technology for the plant, following Shell’s exit.™
PROJECTS & COMPANIES
Gazprom chalks up progress at greenfields
RUSSIA
There have been some developments at three new Gazprom projects this week.
RUSSIA’S Gazprom has reported progress at three major green eld sites in the Arctic, East- ern Siberia and the Far East over the past week.
e Chayandinskoye gas eld has now been connected to the Power of Siberia pipeline, Gaz- prom reported on August 14, paving the way for gas shipments to China to start in December this year. Preparations to ll the pipeline are under- way, it said.
Chayandinskoye contains 1.4tn cubic metres of gas and 76.7mn tonnes of condensate, making it one of the largest gas elds in Eastern Siberia. It will ow 25bn cubic metres per year of gas to China at peak capacity – a milestone that should be reached in the mid-2020s. Supplies will be launched under a 30-year deal Gazprom signed with China’s CNPC in 2014, valued at $400bn.
Before Chayandinskoye hits its peak, Gaz- prom is expected to commission a second East- ern Siberian gas project, Kovykinskoye, which is also anticipated to ow 25 bcm at maximum annual capacity. Power of Siberia is capable of transporting 38 bcm of gas per year.
Meanwhile, o shore the Far East’s Sakhalin Island, Gazprom’s o shore services arm Gazprom
Flot has reported completing a production well at the South-Kirinskoye eld. e well was dug using Gazprom’s Polyarnaya Zvezda semi-submersible, the company said on August 14.
With 711.2 bcm in C1+C2 recoverable reserves, South-Kirinskoye is one of Russia’s largest o shore gas sites. Gazprom discovered the eld in 2010 and had intended to start devel- opment much sooner, though US sanctions imposed on the project in 2015 led to delays. At its peak, the eld should ow at a rate of 21 bcm per year, with this gas expected to be sold in China and South Korea, or processed locally into LNG for export.
In addition, state procurement documents show Gazprom opened a tender on August 16 seeking a contractor for production drilling at the Kharasaveyskoye eld on the Yamal Penin- sula, where Gazprom initiated development in March. Gazprom is o ering up to RUB57.6bn ($861mn) for the work.
Kharasaveyskoye is assessed to hold 2tn cubic metres in C1+C2 resources and to reach a peak output of 32 bcm annually within a few years of its launch in 2023. ™
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