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№ 11 (November 2011)

Siberian Resources for Europe

   Quite recently the most anticipated project of the world power industry has been commenced. And we are talking here about the Nord Stream gas pipeline. On Nov. 8 Russian gas supplies to Europe started.

By Anna Kuzavova

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   The project will help decrease Russia’s reliance on transit countries and provide stability and safety of gas deliveries. The Nord Stream pipeline runs along the seabed of the Baltic Sea, from Vyborg (the Leningrad region) up to Greifswald (Land Mecklenburg-Vorpommern) and connects Russian gas fields with European consumers.

   Everybody understands how significant the Nord Stream is. However, apparently there is no gas pipeline that could operate without stable gas feed. That is why the project should be reviewed in the integrated manner in terms of both logistics and resources.

   Gazprom’s gas transportation system will ensure gas feeding to the Nord Stream. Initially, the Yuzhno-Russkoye field in the Yamal-Nenets Autonomous District will be used as a resource base, later Shtokman’s resources will be used for the same purpose as well.

Resource Base is the Way to Success

   With regard to reserves, the Yuzhno-Russkoye oil and gas condensate field is the one of the Russia’s largest. Its total volume exceeds 1 trillion cubic meters of gas and 40 million tons of oil.

   The project is international, and the field is being developed by three shareholders: Russia’s Gazprom; German Wintershall, a 100-percent subsidiary of BASF; and E.ON Ruhrgas E&P, a 100-percent subsidiary of E.ON group of companies.

   The Yuzhno-Russkoye field was discovered in 1969 by the Urengoi Oil and Gas Exploration Expedition. However, in Soviet period the field’s development was suspended. It started a new life in 2004 after Gazprom had defined the procedure to bring the field into operation using the project financing.

   In 2006, works on the field infrastructure commenced and in October 2007, the actual gas production began. Also in December 2007, the field officially went into operation and Gazprom’s CEOs stressed the field’s significance for Russia’s gas production. At the inauguration ceremony Gazprom’s BOD chairman Alexey Miller stated: “Start of the Yuzhno-Russkoye’s operation is the most important event in Gazprom’s business life in 2007. This is a striking example of implementation of the company’s consistent policy aimed at the increase of its production capacity and formation of reliable reserves to ensure stability and safety of gas supplies to both local and international markets.”

   Today, the Yuzhno-Russkoye field has reached its estimated capacity in terms of production volumes. As of 2009, its annual gas production amounts to 25 billion cubic meters and this production level is not expected to decline in the next 10 years.

   After the Nord Stream commissioning, Severneftegazprom’s responsibility with regard to maintaining the field’s production level increases given the company’s important role as the provider of a resource base for the gas pipeline.

Implementation of Innovations

   The Yuzhno-Russkoye field was brought into operation and reached a commercial gas production level at the earliers possible date – in less than two years, given that the infrastructure had been built from scratch. One may say without exaggeration that innovative process solutions used for the project are the most advanced ones: to ensure gas production stability, for all stages of the project the state-of-the-art control systems with the latest generation hardware and software have been employed.

   A complex gas treatment plant is a highly automated complex equipped with a modern Russian and foreign equipment combining modern precision technologies, automation and project solutions.

   Control systems are equipped with special instrumentation, telemetry complex and software which enable to provide operative control of all processes, maintain optimal parameters of the equipment’s operation, instantly warn about problems, and prevent contingency and emergency.

   Technical solutions employed at the Yuzhno-Russkoye field are to boost up productivity, efficiency and reliability of equipment as well as reduce additional expenses and negative impact on the environment.

   The field’s booster station used to compress the formation gas employs four gas compressor units by Ural, each equipped with electric starters, magnetic levitation systems and dry gas seals. OJSC Severneftegazprom was the first of the Gazprom Group to apply this combination of equipment. Innovative solutions are used in the systems which control operation of gas wells and of gas gathering line headers and also in the systems for gas dehydration and tank gas metering.

   At the well they also constructed a captive power plant which is equipped with self-contained gas turbine units and which provides generation of magnifical total power and this power plant is also distinguished with a high operational reliability while having good thermal performance, environmental, technical and economic characteristics.

High Technologies Overcome Difficulties

   The main gas reserves (over 600 billion cubic meters) of the Yuzhno-Russkoye field are concentrated in the Cenomanian deposits which are considered to be normal in terms of their recoverability. Moreover, about 30 percent of total gas reserves occur in the Turonian gas reservoir. They are estimated as hard-to-recover reserves due to reservoirs’ low permeability, variability of their extension, small gas flow rate, low reservoir temperatures and abnormally high reservoir pressure. That is why, to efficiently develop the field, experience and technologies pertaining to development of hard-to-recover reserves are needed.

   Severneftegazprom was the first in Russia to start development of Turonian gas deposits. Moreover, previously neither Russian nor foreign companies attempted commercial development of such deposits in Western Siberia.
Development of Turonian deposits drilling straight holes is deemed inefficient. Given the abovestated, the company’s experience in drilling a multilateral subhorizontal well is truly unique. The motherbore of the multibranch well has the system of tubing-string completion intended for separate operation. Such system enables to perform the works on development, research and exploration separately in the motherbore and to a branch hole of the well, thereby increasing gas output productivity.

   OJSC Severneftegazprom invited the best Russian and Western specialists to work on the project: the well had been constructed under the project developed jointly with TymenNIIgiprogaz. Gazprom bureniye and Halliburton became the main drilling contractors.

   In 2011, successful work resulted in drilling of the first multilateral well in Turonian reservoir. The wellbore testing has finished and test production is expected. The well is currently tested and waits for test production. However, they have already yielded good results: in May 2011 the first Turonian gas was produced from the well. The well’s estimated production rate in future can be set at the level of 200,000 cubic meters per day. By the year-end,

   Severneftegazprom plans to connect it to the existing gas-collecting network of Senomanian wells.

   Commercial gas production from the Yuzhno-Russkoye’s Turonian gas reservoir is the foundation to ensure the long-term development that the Сompany is already laying down.

Stanislav Tsygankov, General Director, Severneftegazprom:

   It is a great honour for our company and for me personally to participate in such a large-scale global project as Nord Stream. Any resources will be of no use without a developed transport infrastructure. Similarly, the infrastructure becomes useless without sufficient resources. That is why projects of this kind, where every link is important, may be considered integrated.

   Currently, the Yuzhno-Russkoye field has reached the annual gas production volume that ensures stable gas supply for the Nord Stream. The future may offer us many plans, projects and initiatives, and I am convinced that all of them will be implemented through the efficient teamwork, support of our shareholders and partners, as well as maintenance and improvement of our technological base.

The Company’s Brief

   OJSC Severneftegazprom is one of the largest gas producing companies in the RF. It is an international, Russian-German joint project in the gas production industry. As for the Company's shareholders, the Russian OJSC Gazprom (50% plus 6 of ordinary shares) is the main one, and two German companies: Wintershall Holding GmbH (25% minus three ordinary shares plus three preferred shares without a voting right) and E.ON Ruhrgas E&P GmbH (25% minus three ordinary shares plus three preferred shares without a voting right).
OJSC Severneftegazprom is an example of efficient Russian-German cooperation, joining Western technologies and Russian experience pertaining to operation in severe climate.   

   In 2011 the Сompany celebrated its 10th anniversary and showed outstanding performace specially mentioned by both shareholders’ and international industry’s representatives.

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