Page 7 - GLNG Week 50 2022

GLNG COMMENTARY GLNG

signed off on next year, activity should pick up European market, but once the pipelines are in
in 2024, with Gazprom’s anticipated approval place, these volumes can be redirected towards
of the second stage of the Chayandinskoye gas Asia, opening the market to more Russian gas
and condensate field that supplies gas to China flows.
via the Power of Siberia. There should also be Rosneft too is jacking up investments this
progress at the Payakhskoye field, which forms year, with the company’s capital spending climb-
part of Rosneft’s Vostok Oil megaproject in the ing 14% in the first half year on year, and with
Russian Arctic. the upstream accounting for about 90% of the
Meanwhile, spending on brownfields is pre- total. Upstream investment alone is anticipated
dicted to slide by only 14%, as Russian oil pro- to reach $12.9bn in 2022, according to Rystad,
duction remains firm despite fallout from the in line with last year’s $13.1bn. The Vostok Oil
war. But weaker demand will result in a 20% project will swallow up 25-30% of that amount,
drop in brownfield investments in 2022, accord- Rystad said.
ing to Rystad, with Rosneft and Lukoil alone “Rosneft is carrying out extensive drilling
accounting for around 42% of the total. activities in the area, appraising the deposits to
confirm additional reserves,” Rystad said. “We
Against the trend expect a large portion of the capital investments
Gazprom is an outlier among Russian oil and to go toward the construction of project facili-
gas majors, as in October it approved an updated ties. Excluding these costs, 2022 spending will
plan that would see capital expenditure rise by come in at around $9.5bn compared to $10.7bn
225% this year to $28.6bn. According to Rystad, last year.”
some $10.4bn of that sum would go to upstream Novatek’s priority prior to the war was on
projects, down slightly from $11bn in 2021, with raising capital for Arctic LNG-2. The company
the majority of this year’s total being funnelled had been aspiring to raise its LNG output from
into gas and condensate reserves in the Russian the current 19mn tonnes per year to 40mn tpy
Far East and on the Yamal Peninsula. by 2027, with the launch of Arctic LNG-2’s three
“Although some of these discoveries were trains and a fourth mini-train at Yamal LNG.
intended as feedstock for gas deliveries to “However, this target is expected to take five
Europe before the war with Ukraine and are to six years longer to achieve. The operator is
now estimated to take longer to come on stream, focused on bringing online the Arctic LNG-2
Yamal is still positioned to be the next largest Train 1, and work on the remaining trains has
gas hub for the country in the coming years,” been halted for now,” Rystad said. “The project
Rystad said. Gazprom is still developing major partners had secured financing for 57% of the
fields such as the Bovanenkovskoye group and total required investment of around $23bn by
Kharasaveyskoye and is building the infrastruc- the end of 2021.”™
ture to connect the fields. Gas from the Yamal
fields is predominantly used as feedstock for the

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