Eastern Gas Program

Potential of Far East and Eastern Siberia

Eastern Siberia and the Far East cover nearly 60 per cent of the Russian Federation. According to the official estimate, the initial aggregate gas resources of Eastern Russia account for 52.4 trillion cubic meters onshore and 14.9 trillion cubic meters offshore. At the same time, the regional gas potential has been poorly explored standing at 7.3 per cent for the onshore area and 6 per cent for the continental shelf.

Favorable geological preconditions for discovering new major fields here, fine prospects for natural gas production and stockpiling in Eastern Russia as well as the considerable significance of the region in terms of Russia’s socio-economic development are the key reasons for identifying Eastern Siberia and the Far East as a region of Gazprom Group’s strategic interests. Natural gas reserves and resources in Eastern Russia make it possible to establish new major gas and oil production centers that would satisfy the domestic demand of Russia’s eastern regions and secure export deliveries to Asia Pacific in the long term.

The state-run Eastern Gas Program is the baseline document for developing the gas industry in Eastern Russia. Gazprom started implementing the provisions contained in the Program prior to its official approval.

Eastern Gas Program

The September 2007 Order by the Russian Industry and Energy Ministry the state-run Development Program for an integrated gas production, transportation and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries (Eastern Gas Program). Gazprom was appointed by the Russian Federation Government as the Program execution coordinator.

Plan of resources development in the Eastern Siberia and Far East of Russia

Plan of resources development in the Eastern Siberia and Far East of Russia

Eastern Russia has so far seen the creation of new gas production centers in the Sakhalin Region and the Kamchatka Territory. A gas production center is being actively shaped in Yakutia, similar centers in Irkutsk and Krasnoyarsk are next in turn. The Program stipulates that together with gas production centers and the unified gas transmission system formation, gas processing and gas chemical industries will be developed including the capacities for helium and liquefied natural gas (LNG) production.

Thus, the gas and processing industries in Eastern Russia will be developed in a comprehensive way. The benefits of eastern gas containing a lot of valuable components will be used to the maximum extent possible. In future, the gas transmission system under construction will be integrated in the Unified Gas Supply System of Russia creating the world’s largest unified technological complex.

A top priority for Gazprom in the east as well as a basic principle of the Eastern Gas Program is supplying Russian consumers with natural gas.

Gazprom’s resource base in Eastern Russia

In Eastern Russia Gazprom owns an abundant resource base, which makes it possible to implement large infrastructure projects. Today Gazprom, its subsidiary and affiliated companies hold several dozen licenses for using subsurface resources in Eastern Siberia and the Far East. These include the licenses for the Chayandinskoye field in Yakutia, the Kovyktinskoye and Chikanskoye fields in the Irkutsk Region as well as the Kirinskoye and Yuzhno-Kirinskoye fields offshore the Sakhalin Island.

At present, the A+B+C1+C2 gas reserves of Gazprom’s licensed areas in Eastern Siberia and the Far East exceed 5 trillion cubic meters. The Company carries out accelerated geological exploration activities in Eastern Russia with a view to build up its resource base.

Gazprom’s eastern projects

Chayandinskoye filed. This is the basic field for the creation of the Yakutia gas production center. Its gas reserves exceed 1.2 trillion cubic meters. In 2014 first oil will be produced from the field. In 2017 Gazprom will launch gas production, the annual design capacity of the field amounts to 25 billion cubic meters of gas. In Yakutia the Company also owns the Sobolokh-Nedzhelinskoye, Verkhnevilyuchanskoye, Tas-Yuryakhskoye and Srednetyungskoye fields.

Chayandinskoye field

Chayandinskoye field

Kovyktinskoye field. This is the basic field for the creation of the Irkutsk gas production center. Its gas reserves total 1.5 trillion cubic meters. The field is at the stage of pilot commercial development, the Company continues geological exploration activities. The expected production level is about 35 billion cubic meters of gas per year. Next to the Kovyktinskoye field Gazprom has discovered the Chikanskoye field, which is at the stage of pilot commercial operation now.

Gas treatment unit No.102 at Kovyktinskoye field

Gas treatment unit No.102 at Kovyktinskoye field

Sakhalin II project. This is a large integrated PSA project in the Sakhalin shelf carried out by an international consortium. Gazprom is the majority shareholder in the project. As part of the Sakhalin II project Russia’s first LNG plant was built. Russian LNG exports began in 2009.

Sakhalin II project Molikpaq platform (PA-A)

Sakhalin II project Molikpaq platform (PA-A)

Sakhalin III project. Gazprom owns licenses for the Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks of the project. In October 2013 gas production was launched at the Kirinskoye field offshore Sakhalin Island. The designed level of production is 5.5 billion cubic meters. Geological exploration is underway within the project at the Yuzhno-Kirinskoye field discovered by Gazprom. The Yuzhno-Kirinskoye field is scheduled for commissioning in 2018.

Onshore processing facility at Kirinskoye field

Onshore processing facility at Kirinskoye field

Gas supply to Kamchatka. Gazprom is winding up the pre-development of the Kshukskoye and Nizhne-Kvakchikskoye fields on the west coast of the Kamchatka Peninsula. Starting from September 2010 natural gas has been fed to consumers in Petropavlovsk-Kamchatsky.

Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS). This GTS is intended for the development of gas supply to the Khabarovsk Territory and the Sakhalin Region as well as the start of gas supply to the Primorye Territory. September 2011 saw the commissioning of the first startup complex of the GTS. The gas pipeline stretches for more than 1,800 kilometers. Once the system is fully developed, it will render possible to convey about 30 billion cubic meters of gas not only covering the demand of Russian regions but also creating the potential for export supplies.

Vladivostok gas distribution station No.1

Vladivostok gas distribution station No.1

Sobolevo – Petropavlovsk-Kamchatsky gas trunkline. Brought onstream in September 2010, this trunkline ensures reliable gas supply to Petropavlovsk-Kamchatsky. It is 392 kilometers long with the annual throughput of 750 million cubic meters of gas.

Sobolevo – Petropavlovsk-Kamchatsky gas trunkline commissioning

Sobolevo – Petropavlovsk-Kamchatsky gas trunkline commissioning

Power of Siberia gas transmission system (GTS). This GTS will become a unified gas transmission system for the Irkutsk and Yakutia gas production centers and convey gas from these centers to Vladivostok via Khabarovsk. It will stretch for about 4,000 kilometers and have the annual throughput of 61 billion cubic meters of gas.

Developing gas resources and shaping gas transmission system in Eastern Russia

Developing gas resources and shaping gas transmission system in Eastern Russia

Gas processing complex in Belogorsk. This complex will process the multi-component gas with a considerable amount of helium fed from the Chayandinskoye field.

Vladivostok LNG project. This project implies the construction of an LNG plant in the Khasan District of the Primorye Territory. The plant will comprise three production trains with the annual capacity of 5 million tons of LNG each. The first train will be commissioned in 2018. In February 2013 the project entered the investment stage.

3D model of Vladivostok LNG project

3D model of Vladivostok LNG project

Gasification development in Eastern Russia

A top-priority area of Gazprom’s activities is the gasification of the Russian Federation regions aimed at achieving the maximum economically viable level of gasification in the Russian Federation. Despite abundant natural gas resources, the average gasification level in Eastern Siberia and the Far East does not exceed 7 per cent, while it makes up 64.4 per cent throughout Russia. This situation is to be changed.

The General Gas Supply and Gasification Schemes elaborated for the regions of Eastern Siberia and the Far East stipulate a comprehensive approach to gasification. The Schemes also provide for the wide use of liquefied hydrocarbon and natural gases in parallel with pipeline natural gas.

In order to develop gasification, Gazprom allocates funds for the construction of gas branches, gas distribution stations and inter-settlement gas pipelines. The regional administrations are responsible for the construction of intra-settlement gas grids and preparation of consumers for gas supplies.

Regions of Eastern Gas Program implementation

Amur Region

The Agreement of Cooperation between Gazprom and the Government of the Amur Region was signed in 2011. In 2009 Gazprom elaborated the General Gas Supply and Gasification Scheme of the Region.

The prospects for supplying natural gas to the Amur Region are related to the establishing of the Yakutia gas production center. In addition, a section of the Power of Siberia GTS will run across the Region’s territory. The Belogorsk Gas Processing Plant will also be located in the Region.

Jewish Autonomous Region

Gazprom and the Government of the Jewish Autonomous Region entered into the Agreement of Cooperation and the Accord on Gasification in 2007. The General Gas Supply and Gasification Scheme of the Region was developed in 2009.

The prospects for supplying natural gas to the Region are related to establishing the Yakutia gas production center. In addition, a section of the Power of Siberia GTS will run across the Region’s territory.

Warm lakes. South coast of Lake Baikal

Warm lakes. South coast of Lake Baikal

Trans-Baikal Territory

The Agreement of Cooperation between Gazprom and the Chita Region was signed in 2006, between Gazprom and the Aginsk Buryat Autonomous Area – in 2007. The Accord on Gasification of the Trans-Baikal Territory was inked in 2010. The General Gas Supply and Gasification Scheme of the Trans-Baikal Territory was approved in 2009.

The prospects for supplying natural gas to the region are related to establishing the Irkutsk gas production center.

Irkutsk Region

Gazprom and the Irkutsk Region Government entered into the Agreement of Cooperation and the Accord on Gasification in 2010 and 2009 respectively. The General Gas Supply and Gasification Scheme of the Irkutsk Region was approved by the Regional Government Decree in 2005 and was adjusted in 2009.

A major gas production center will be established in the Region on the basis of the large Kovyktinskoye field. A part of the Power of Siberia GTS will be built in the Region as well. The Investment Rationale is being developed for the comprehensive project for gas supply to the southern Irkutsk Region. Based on this Investment Rationale, the General Gas Supply and Gasification Scheme of the Region will be updated. According to the results of the Investment Rationale review, the schedule of the Kovyktinskoye field commissioning will be determined.

Kamchatka Territory

Gazprom and the Kamchatka Territory Government entered into the Agreement of Cooperation and the Accord on Gasification in 2009 and 2008 respectively. The General Gas Supply and Gasification Scheme of the Kamchatka Territory was developed in 2009. Gazprom and the Kamchatka Territory Government approved the joint program for the regional gasification between 2012 and 2015.

A gas production center was established in the region. Gazprom is finishing the pre-development of the Kshukskoye and Nizhne-Kvakchikskoye fields. The Sobolevo – Petropavlovsk-Kamchatsky gas pipeline was constructed. In 2010 the Company launched gas supplies to the consumers in the regional center.

Petropavlovsk-Kamchatsky

Petropavlovsk-Kamchatsky

Krasnoyarsk Territory

The Agreement of Cooperation between Gazprom and the Krasnoyarsk Territory Government was signed in 2012, the Accord on Gasification – in 2007. The regional General Gas Supply and Gasification Scheme was inked in 2010.

A gas production center will be created in the Territory.

Primorye Territory

The first Agreement of Cooperation between Gazprom and the Primorye Territory Administration was signed in 2005, a new one – in 2012. The Accord on Gasification was concluded in 2006. The General Gas Supply and Gasification Scheme of the Primorye Territory was developed in 2009. A joint program was approved for regional gasification between 2012 and 2015.

A section of the Sakhalin – Khabarovsk – Vladivostok GTS was constructed in the Primorye Territory along with the Vladivostok gas distribution station and the inter-settlement gas pipeline on the Russky Island. In September 2011 natural gas was supplied to consumers in Vladivostok for the first time. The Vladivostok LNG project is to be implemented in the Khasan District of the Primorye Territory.

Republic of Buryatia

Gazprom and the Republic of Buryatia entered into the Agreement of Cooperation and the Accord on Gasification in 2008. The regional General Gas Supply and Gasification Scheme was approved in 2009.

The prospects for supplying natural gas to the region are related to the establishing of the Irkutsk gas production center.

Republic of Sakha (Yakutia)

Gazprom and the Republic of Sakha (Yakutia) entered into the Agreement of Cooperation and the Accord on Gasification in 2007 and 2008 respectively. In 2009 the regional General Gas Supply and Gasification Scheme was approved. In 2010 the parties entered into the Partnership Agreement for socioeconomic development within the Eastern Gas Program.

A gas production center based on the large Chayandinskoye field will be established in the region. In future the Power of Siberia GTS will be laid in the region.

Lena pillars, Yakutia

Lena pillars, Yakutia

Republic of Tyva

The Agreement of Cooperation between Gazprom and the Republic of Tyva was signed in 2006. The General Gas Supply and Gasification Scheme of the region was developed by Gazprom in 2001.

The prospects for supplying natural gas to the region are related to the establishing of the Irkutsk gas production center.

Sakhalin Region

Gazprom and the Government of the Sakhalin Region entered into the Agreement of Cooperation and the Accord on Gasification in 2006. The General Gas Supply and Gasification Scheme of the Sakhalin Region was approved in 2009. In 2011 the joint program was agreed for the regional gasification until 2014.

A gas production center is established in the Region, where Gazprom implements the Sakhalin II and Sakhalin III projects. The Company constructed a section of the Sakhalin – Khabarovsk – Vladivostok gas transmission system with the main compressor station, the Dalneye gas distribution station and a gas branch from the Southern product transfer facility of the Sakhalin II project to the Dalneye GDS. In 2011 Gazprom commissioned gas supply facilities of Yuzhno-Sakhalinsk and launched gas supplies to the regional center.

Khabarovsk. Bridge over Amur River

Khabarovsk. Bridge over Amur River

Khabarovsk Territory

The Agreement of Cooperation between Gazprom and the Khabarovsk Territory Government was signed in 2002 and prolonged in 2009. The General Gas Supply and Gasification Scheme of the region was developed in 2009. The Accord on Gasification was concluded in 2011. In 2012 Gazprom and the Khabarovsk Territory Government approved a joint program for the conversion of motor vehicles and agricultural machinery to NGV fuel.

The Sakhalin – Khabarovsk – Vladivostok GTS runs through the Khabarovsk Territory. In future the Power of Siberia GTS will be laid in the region.