Page 144 - RusRPTSept21

● Novatek
Russia’s biggest LNG exporter Novatek put further emphasis on environmental, social and corporate governance (ESG) concerns in its latest corporate call on July 29, while also announcing plans to expand oil production. As analysts at BCS Global Markets (BCS GM) noted, “ESG dominated the presentation, with eight of the first 12 slides devoted to sustainability.” Among the highlights, Novatek noted that up to 20-30% of gas usage at its Yamal LNG project could be replaced with hydrogen. In the company’s future LNG projects, the ratio could reach 40-50%. Novatek has been working since last year with Baker Hughes and Siemens on the potential of its gas turbines to run on hydrogen in order to lower direct emissions from its production activities. Hydrogen can be produced from natural gas without emissions if the CO2 that is released is captured and stored.
Gazprom and Novatek have agreed that Gazprom will send some of its condensate produced in the Nadym-Pur-Taz region to Novatek’s production facilities for treating, Kommersant reports. Gazprom has de-mothballed the Urengoi-Purovsk pipeline, which had been used for transporting gas condensate from Novatek’s fields to Gazprom’s Urengoi condensate treating facility (before Novatek launched its own condensate treatment infrastructure). The pipeline is to operate in reverse mode, transporting condensate from Gazprom’s Nadym-Pur-Taz fields to Novatek’s Yurkharovskoye field for de-ethanisation and then to Purovsky Plant for stabilisation. The volumes delivered are to be 85kt/month through November and 40kt/month in December 2021-May 2022. According to the paper’s sources, deliveries have already started and Novatek might be receiving Gazprom’s gas condensate under a purchase agreement.
● Lukoil
Lukoil reported its 2Q21 operating results on 9 August. Total liquids production was up 3% q/q and flat y/y at 19.9mnt. Production in Russia was up 4% both q/q and y/y to 18.6mnt, while production outside of Russia fell 5% q/q and 10% y/y to 846kt. The company has seen a 170mbpd increase in production vs. May 2020 due to OPEC+ ramping up output. Lukoil also increased its production of high viscosity oil (HVO) at the Yaregskoye and Usinskoye fields by 5.1% y/y in 1H21 to 2.6mnt. Production at the Filanovsky and Korchagin fields in the Caspian Sea rose 1.7% y/y in 1H21 to 3.7mnt. Gas production in Russia slipped 7% q/q and 8% y/y to 4bcm, while production outside of Russia was down 32% q/q but up 47% y/y to 3.1bcm. Although total gas production dropped 20% q/q, it was up 10% y/y to 7.1bcm. Total refining throughput increased 9% q/q and 16% y/y to 15.7mnt, while throughput in Russia was up 4% q/q and 12% y/y to 10.4mnt. The company’s production numbers came in ahead of our estimates, while gas production was below our projections. While the drop in gas production abroad was mostly due to
144 RUSSIA Country Report September 2021 www.intellinews.com