Russian gas giant Gazprom is doubling down on the vast natural gas reserves on and offshore the Yamal peninsula, an Arctic lowland region in northwestern Siberia.
The Yamal peninsula is already producing natural gas and is also home to one of Russia’s already operational liquefied natural gas (LNG) projects—Yamal LNG—run by another domestic gas producer, Novatek.
Gazprom’s bet on developing more of the huge natural gas resources in Yamal is a strategic one, as it would expand its northern gas transmission corridor, with more resources from the Arctic possibly feeding the northern route of exports to European markets—the operational Nord Stream pipeline and the planned—and highly controversial—Nord Stream 2 project.
Last week, Gazprom approved the development of the Kharasaveyskoye gas and condensate field and the gas transmission system, expected to begin in 2019 and to ship first gas in 2023. The company is betting that Yamal will become the largest natural gas production center in Russia and replace the dwindling reserves of the Nadym-Pur-Taz region.
At present, Gazprom produces natural gas in Yamal from the two gas production facilities at the Bovanenkovskoye field, and it plans to launch a third and final gas production facility this year, which will bring the field to its design production capacity of 115 billion cubic meters of gas per year.
The Kharasaveyskoye gas field lies north of Bovanenkovskoye, mostly onshore in the Yamal Peninsula and partly offshore in the basin of the Kara Sea, and is estimated to have 2 trillion cubic meters of gas reserves. Gazprom plans to build a gas pipeline of around 62 miles (100 kilometers) from Kharasaveyskoye to the Bovanenkovskoye field. It will then feed the gas into Russia’s Unified Gas Supply System. The company is already conducting design works to expand the capacities of the northern gas transmission corridor, Gazprom said.
“The development of the Yamal gas production center is an ambitious strategic goal of national importance. The center is key and essential to the domestic gas industry in the 21st century. It offers a new frame of reference for gas flows in Russia and export markets,” said Alexey Miller, Chairman of the Gazprom Management Committee.
“Bringing Bovanenkovskoye to its full capacity, exploring Kharasaveyskoye and later the other Yamal-based fields, and expanding the northern gas transmission corridor are all crucial activities for the Company,” Miller added.
Gazprom has been raising its exports to Europe and its gas sales in the first half of this year exceeded 100 bcm for the first time—at 101.2 bcm, they were 5.8 percent higher than the exports in the first half of 2017, the company says.
The other big project in Yamal, the Novatek-run Yamal LNG, is now exporting LNG to both European and Asian markets, after LNG ice breakers made their first summer voyage through the Northern Sea Route passage from Yamal toward China.
In the Arctic, Novatek plans a second LNG project—Arctic LNG 2 on Gydan—a peninsula next to Yamal across the Gulf of Ob.
France’s Total—which aims to expand its LNG business and is a partner in the Yamal LNG project—signed in May an agreement to acquire a minority stake in Arctic LNG 2. The final investment decision for this new project is expected next year, with plans to start up the first train by the end of 2023.
Looking to replace dwindling natural gas reserves elsewhere and to boost exports to Europe and Asia, Russia’s biggest gas producers are now betting on developing the huge reserves in its Arctic areas.
|Tsvetana Paraskova for OilPrice.com|