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FSUOGM COMMENTARY FSUOGM

Permafrost and Russian oil

Around 45% of Russian production fields are located in the highest hazard zone

RUSSIA AN enormous fuel spill in northern Siberia has The Yamalo-Nenets region alone accounts
highlighted the threat that climate change poses for about 80% of Russian gas production. It is
WHAT: to oil and gas infrastructure in Russia’s Arctic home to the super-giant Zapolyarnoye field,
A giant fuel spill in zone. which Gazprom brought on stream in 2001.
northern Siberia is Russian President Vladimir Putin declared It boasts an annual output capacity of 130bn
suspect to have been a state of emergency last week after two storage cubic metres – equivalent to around 65% of
caused by permafrost tanks at a combined heat and power (CHP) plant the gas that Russia sells in Europe each year.
melting. in city of Norilsk, north of the Arctic Circle, col- Further north there is similar-sized Bovanen-
lapsed, spilling 21,000 tonnes of diesel fuel into kovskoye field, which is ramping up to 140
WHY: the Ambarnaya and Daldykan rivers. bcm per year. A 2017 report by the Arctic
Permafrost covers 65% The station’s owner, Norilsk Nickel, has sug- Council’s Arctic Monitoring and Assessment
of Russia and much of gested that the incident could have been caused Programme (AMAP) noted that the site had
the infrastructure in by the melting of permafrost, a layer of soil or “seen a recent increase in landslides relating to
these areas is not built to rock that stays frozen all year and is located thawing permafrost.”
withstand its thawing. underneath layers that freeze and thaw annually. Another key project is the 17mn tonne per
This prompted Russia’s prosecutor general on year (tpy) Yamal LNG export terminal, launched
WHAT NEXT: June 5 to order a review of hazardous structures by Novatek and its partners in late 2017.
Receding permafrost built on Arctic permafrost. Many of the latest oil and gas develop-
will be a key concern for Permafrost covers around 65% of Russia, and ments in Russia’s permafrost zone have been
Russian producers in the much of the infrastructure in these areas is not designed with climate change in mind. The
years to come. built to withstand this layer thawing. But this is processing trains and storage tanks at Yamal
exactly what is happening. LNG, for example, sit on top of 65,000 piles
“Permafrost is undergoing rapid change” as driven up to 28 metres into the permafrost to
global temperatures rise, a report published last ensure stability. These piles are kept cold using
year by the Intergovernmental Panel on Climate a thermosyphon system that ensures the soil’s
Change (IPCC) stated, warning that this change load-bearing capacity is maintained through-
threatened the “structural stability and func- out the project’s life. But at older projects,
tional capacities” of oil industry infrastructure. structures could sink, causing hazards and
The same report estimates that around “45% of serious disruptions to production and requir-
the oil and natural gas production fields in the ing costly repairs.
Russian Arctic are located in the highest hazard It is likely too late to save much of the per-
zone.” mafrost, with the AMAP forecasting that even
Putin is a well-known climate change scep- if greenhouse gas (GHG) emissions were cut
tic and his government has often pointed to the roughly in line with the targets set under the
potential benefits to Russia of rising tempera- Paris deal, this would only “stabilise near-sur-
tures rather than the negatives. For one, thanks face permafrost extent at roughly 45% below the
to melting ice, Russia’s once-impassable Arctic current values.” While developers will be able
waters have emerged as a potential key global to account for melting permafrost when plan-
shipping route. ning new projects, this will drive up costs in an
Moscow views the Northern Sea Route’s already high-cost region.
(NSR) development as a strategy priority. Russian producers are counting on Arctic
Besides the economic boost from transhipment, fields to deliver extra production that can offset
the route will provide an outlet for Russia’s vast decline at older deposits further south. Gaz-
Arctic oil and gas resources, previously consid- prom has said it expects to produce as much
ered too remote to exploit. as 360 bcm per year on the Yamal Peninsula
Even so, Russia’s ratification in September last within the next few decades – equal to around
year of the 2015 Paris Accord indicates that it is half of Russia’s national production today.
beginning to consider the downside of climate Novatek, meanwhile, is planning a raft of new
change seriously. The accord does not commit LNG projects in the area, with the aim of pro-
Russia to making any drastic cuts to its own ducing 70mn tpy of the super-cooled gas by
emissions, although by supporting it, Moscow 2030.
hopes that it will lead other countries to take Arctic oil production is also on the rise. Ros-
meaningful steps to tackle the problem. Melting neft’s ambitious Vostok Oil project in northern
permafrost is sufficient cause for Russia to worry. Krasnoyarsk, if realised, could flow up to 2mn
barrels per day (bpd) of oil, the company claims.
Arctic oil and gas Receding permafrost will therefore be a
Russia has been producing oil and gas in areas pressing concern for Russia’s oil and gas industry
north of the Arctic Circle for decades. over the years to come. ™

P8 www. NEWSBASE .com Week 23 10•June•2020