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May 2008

Vol. 13, No. 19 Week of May 11, 2008

Gazprom invests big bucks in gas line

First pipe arrives for gas line from Russia’s Arctic onshore at Yamal Peninsula to Europe, gets green light from indigenous people

Sarah Hurst

For Petroleum News

Russia’s state-owned Gazprom received the first pipe for its gas pipeline project on the Yamal Peninsula in early April, Sever Press reported.

The Yamal Peninsula is on the east side of the Kara Sea, north of Siberia. The peninsula and the adjacent shelf zone of the Kara Sea hold 11 proven natural gas fields and 15 oil and gas condensate fields with potential reserves estimated at 50.5 trillion cubic meters.

The Bovanenkovskoe-Ukhta pipeline is scheduled to come online by 2011, taking gas to European markets. Part of the pipeline will be on the seabed under Baydarat Bay. The annual capacity of the 2,451-kilometer (1,523-mile) pipeline will be 250 billion cubic meters (8.8 trillion cubic feet) of gas.

The project also received a boost in April when Gazprom obtained consent from regional indigenous peoples for the development of the Bovanenkovskoe gas field. All decisions on building the pipeline and infrastructure in the area will be made only after consulting with representatives of the indigenous peoples, said Igor Morozov, the head of Gazprom subsidiary Gazprom Dobycha Nadym.

Adaptations that Gazprom will make to its project include protection for reindeer migration routes. Several thousand nomadic Nenets and Khanty reindeer herders on the Yamal Peninsula oversee about 500,000 reindeer.

Developing gas reserves on the Yamal Peninsula is a priority for Gazprom in its plan for production up to 2020. The Bovanenkovskoe field is the largest on the peninsula, slated to produce 115 billion cubic meters a year.

The second-largest gas field on the peninsula is Kharasaveyskoe, due to begin production in 2014.

“According to preliminary forecasts investment in the opening up of the Yamal Peninsula was supposed to amount to 194 million rubles ($8.2 million),” the deputy governor of the Yamal-Nenets Autonomous Okrug, Alexander Kim, told Russian news agencies recently. “In connection with the development of Gazprom’s Bovanenkovskoe gas condensate field, the volume of investment already totals 270 billion rubles ($11.4 billion). By 2010 it will increase to 340 billion ($14.3 billion). This is an enormous sum of money that will allow us to substantially improve all the social and economic indicators of the region for the long term.”






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