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. 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 new large discoveries, fine prospects for natural gas production and stockpiling, as well as their considerable significance in terms of Russia’s socio-economic development are the key reasons for identifying Eastern Russia as a region of Gazprom Group’s strategic interests. Natural gas reserves and resources in Eastern Siberia and the Far East permit to establish new major gas production centers that would satisfy domestic demand in 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 Federation Industry and Energy Ministry approved 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.
Pursuant to the Eastern Gas Program it is planned to establish gas production centers in the Krasnoyarsk Krai, the Irkutsk Oblast, the Republic of Sakha (Yakutia), the Sakhalin Oblast and the Kamchatka Krai. The Program stipulates that simultaneously 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 comprehensively. The benefits of the eastern gas containing a lot of valuable components will be exploited to the maximum extent possible.
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 more than forty licenses for the right to use subsurface resources in Eastern Siberia and the Far East. They include the licenses for the Chayanda field in Yakutia, the Chikanskoye field in the Irkutsk Oblast, the Sobinskoye field in the Krasnoyarsk Krai and the Kirinskoye field offshore the Sakhalin Island.
In the aim of expanding its resource base Gazprom performs geological exploration in the Krasnoyarsk and Kamchatka Krais, the Irkutsk Oblast, the Republic of Sakha (Yakutia) and offshore the Sakhalin Island. By 2030 Gazprom is going to add up to 7 trillion cubic meters of natural gas to the existing resource base in the Siberian and Far Eastern Federal Districts.
The prioritized meeting of Russian consumers’ gas demand is Gazprom’s primary objective in Eastern Russia. The same principle underlies the Eastern Gas Program.
Execution of Eastern Gas Program by Gazprom
Chikanskoye field (Irkutsk Oblast). In 2008 the field was brought into pilot commercial operation. At present, engineering of a gas pipeline from the Chikanskoye field is going on in order to supply natural gas to Sayansk, Angarsk and Irkutsk.
Sobinskoye field (Krasnoyarsk Krai). The work is underway to pre-develop the oil rims. Gazprom is looking at the ways to establish gas processing and gas chemical facilities based on the Sobinskoye field reserves.
Chayanda field (Republic of Sakha (Yakutia)). Being located in Yakutia, the field is unique in terms of natural gas reserves. It also contains considerable amounts of helium. The geological exploration is in progress. It is projected to construct the Yakutia – Khabarovsk – Vladivostok gas pipeline; the issues are being addressed relevant to building Chayanda-based gas processing capacities, as well as constructing LNG production capacities in the Primorsky Krai.
Gas supply to Kamchatka. Gazprom is pre-developing the Kshukskoye and Nizhne-Kvakchikskoye fields on the western coast of the Kamchatka Peninsula. The Company is also constructing the Sobolevo – Petropavlovsk-Kamchatsky gas trunkline planned for commissioning in 2010. In addition, the project stipulates construction of gas distribution networks in Petropavlovsk-Kamchatsky. The Russian Federation Government took a decision to grant Gazprom the subsurface license for the Zapadno-Kamchatsky block. Between 2009 and 2011 natural gas reserves are projected to increase by some 200 billion cubic meters here.
Sakhalin shelf is best prepared for starting up natural gas production and supplying it to the consumers in Russia’s Far East.
Sakhalin II. It is a large integrated PSA project being carried out by an international consortium. Gazprom is the majority shareholder in the project. As part of the project Russia’s first LNG plant was built. Russian LNG exports began in 2009. The royalties and the Russian Federation’s share of produced gas will be delivered to the Far East to promote regional gasification.
Sakhalin III. In 2009 the Russian Federation Government adopted the decision to award Gazprom the subsurface licenses for the Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks of the project. Geological exploration is underway at the Kirinskoye field (subsurface license acquired in 2008). Natural gas production is scheduled for 2014. The field will become one of the natural gas sources for the Sakhalin – Khabarovsk – Vladivostok gas transmission system.
Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS). The system is a paramount target of the Eastern Gas Program. According to the Russian Federation Government’s assignment and the Gazprom Board of Directors’ decision, Gazprom is currently constructing the GTS in order to develop gas supply to the Khabarovsk Krai and the Sakhalin Oblast, as well as to arrange gas supply to the Primorsky Krai starting from the third quarter of 2011. The first GTS start-up complex will have the length of 1,350 kilometers and the capacity of 6 billion cubic meters per annum. In future the system will deliver circa 30 billion cubic meters of Sakhalin gas. This will make it possible to meet the prioritized gas demand of Russia’s Far Eastern regions and to create additional potential for gas exports to Asia-Pacific countries.
Gasification development in Eastern Russia
A top-priority field of Gazprom’s activities is the gasification of the Russian Federation regions oriented at achieving the maximum economically viable level of gasification in the Russian Federation. Despite the abundance of natural gas resources, the average gasification level in Eastern Siberia and the Far East doesn’t exceed 7 per cent, while the identical figure throughout Russia makes up 62 per cent. This situation should be changed.
By now, Gazprom has inked Agreements of Cooperation with eleven out of fourteen Eastern Siberian and Far Eastern regions and Accords on Gasification with nine of them. In 2005 Gazprom developed the General Scheme for Gas Supply to and Gasification of the Irkutsk Oblast. In 2007 the General Scheme for Gas Supply to and Gasification of the Far Eastern Federal District was developed. In 2009 Gazprom plans to accomplish development of the General Schemes for eleven Eastern Siberian and Far Eastern regions.
The General Schemes stipulate a comprehensive approach to the gasification of the Eastern Siberian and Far Eastern regions. The Schemes also provide for a wide usage of liquefied hydrocarbon and natural gases in parallel with pipeline natural gas.
In 2008 the Eastern Siberian and Far Eastern regions joined the Gasification Program for the first time. Among them are the Krasnoyarsk Krai, the Republic of Sakha (Yakutia), the Khabarovsk Krai and the Sakhalin Oblast. In 2009 Gazprom is intent on investing RUB 18.5 billion into the gasification of 69 Russian Federation regions. The Primorsky and Kamchatka Krais, and the Jewish Autonomous District were added to the Program.