Oleg Aksyutin: We will expand UGS capacities
June 1, 2011
Gazprom steadily passed another autumn/winter period having ensured continuous gas supply to its consumers in Russia and abroad. Reliable operation of the UGS facilities played a crucial role in this process. Oleg Aksyutin, Member of the Management Committee, Head of the Gas Transportation, Underground Storage and Utilization Department described how the Company was planning to develop that business line in his interview to the Gazprom website Editorial Board.
- The first Russian UGS facility was built in 1958. Have the past years brought any new engineering solutions?
The underground gas storage sector in Russia is above 50 years old indeed. A wide spread UGS system was created in the country over this period playing the key role today in offsetting seasonal fluctuations in gas demand. All UGS facilities are located close to the major domestic consumers or in the gas transmission system nodes allowing to swiftly send gas flows from storages in the required directions.
In spring and summer Gazprom replenishes its UGS facilities in order to meet the growing gas demand in the autumn/winter period since in the heating season the Company’s UGS facilities ensure some 20 per cent of the entire gas supplies and up to 30 per cent during cold snaps. 2.17 trillion cubic metes of gas passed through the domestic UGS facilities over the entire period of their operation.
While offsetting seasonal fluctuations in gas demand, the UGS facilities play another important role considerably increasing sustainability of supplies and providing the gas transmission system with additional margin of operational safety.
As for the engineering aspect – the progress is moving on of course. New solutions elaborated for gas production were applied in the underground storage sector. First of all, they are aimed at increasing the operational efficiency of UGS facilities and their daily deliverability.
For instance, we have started drilling directional and horizontal wells in addition to vertical ones. This approach considerably increases the deliverability of a UGS facility using fewer wells than simply vertical ones.
State-of-the-art equipment is being introduced such as premium thread casing pipes and new types of wellhead equipment eventually ensuring not only better operational reliability but higher environmental safety as well.
The crisis temporary suspended the UGS capacities buildup in terms of the stored gas volumes. When will the demand for additional storages come up according to the experts?
The global economic crisis cut down natural gas consumption volumes which certainly affected daily withdrawals from the Russian UGS facilities. For instance, in the 2008–2009 autumn/winter period the withdrawals made up only half of the accumulated potential. Therefore, Gazprom resolved to temporary focus investment on increasing the reliability of the existing UGS facilities with reconstruction and retrofitting instead of building up their capacities.
The domestic economy is recovering after the crisis and we are facing the need again to increase the daily deliverability of the UGS facilities. Of course, this task is associated with the need to increase gas reserves in UGS facilities. But the latter is less essential since the volume of currently stored gas is sufficient.
- What are the UGS system development priorities for Gazprom?
The UGS system development tasks are defined by the appropriate 2011–2015 Action Plan that was adopted in January 2011.
First of all, we are planning to expand and reconstruct the existing UGS facilities building up their capacity. First of all, this refers to the Kasimovskoye, Kushchevskoye, Punginskoye, Sovkhoznoye and Kushchevskoye UGS facilities. We will retrofit them replacing obsolete and worn-out equipment and process facilities with the new ones featuring high cost-effectiveness and eco-friendliness.
We will continue deploying new UGS facilities since the opportunities for expanding the existing ones are nearly exhausted. In addition, new UGS facilities will allow for geographical expansion of the network increasing operational reliability of the Russian Unified Gas Supply System.
- How will the daily deliverability of the Russian UGS facilities evolve?
According to the 2011–2015 Action Plan it is planned to increase the maximum potential daily deliverability by 40 per cent.
Operational UGS facilities used by Gazprom abroad and prospective foreign UGS projects with Gazprom Group’s participation
How did the current winter season pass, what was the difference comparing to previous winters both in terms of objective external conditions (weather, export) and requirements for the UGS facilities specified by the Company Management?
Before the withdrawal season started the Management tasked the Company to maintain the sufficient operating gas reserve in UGS facilities in case of a cold snap.
In the middle of February a cold snap occurred in Russia. Even though 32 billion cubic meters of gas had already been withdrawn from the facilities by that moment making exactly half of the working gas capacity, they promptly reached daily deliverability of 520 million cubic meters allowing domestic consumers to smoothly pass the coldest period of the season. At the same time, export deliveries fully met the demand and the contracts. Thus, we assess this winter period as successful.
- Key UGS facilities are created either in depleted fields or aquifers. However, the new Kaliningradskoye and Volgogradskoye UGS facilities are being constructed in rock salt deposits. What is the motivation for building UGS facilities in salt caverns and what is the fundamental distinction of these facilities?
Gazprom runs a total of 25 UGS facilities in Russia with 17 constructed in depleted fields and 8 – in aquifers.
Salt caverns became the best fit geological structures when choosing construction options for the UGS facilities intended for gasification of the Kaliningrad and Volgograd Oblasts. Leaching plants have already been built here and the caverns washout in the salt deposits initiated.
Industrial facilities constructed by Kaliningradskoye UGS branch company
If compared to conventional deposits, UGS facilities in salt caverns are specific with quite insulated vessel formed after salt leaching (washout) where gas can move much faster comparing to porous depleted reservoirs or aquifers. Therefore, with smaller working gas volumes these UGS facilities have greater deliverability during a short period of time (for instance, during cold snaps) and can be rapidly replenished.
These are the first Russian UGS facilities created in salt caverns but this is not to say that there is no experience of building such UGS facilities. In 1968 the first salt cavern formed through leaching (washing out salt with water in simple terms) was put into operation in the Abovyanovskoye UGS facility in Armenia. Three stages of this facility have already been commissioned. The working gas volume of the Abovyanovskoye UGS facility will be equal to 380 million cubic meters once its full storage capacity is reached. The UGS facility is being operated and constructed by ArmRosGazprom with an 80 per cent of stake owned by Gazprom.
- Could you please mention the specifications of the new UGS projects: Bednodemyanovskoye, Shatrovskoye, Novomoskovskoye, UGS facility in Tatarstan? What tasks should they solve?
Pre-investment studies have been performed for the said UGS facilities. Engineering design has been prepared for the Bednodemyanovskoye UGS facility construction envisaging the working gas volume of 5 billion cubic meters. 1 billion cubic meters are envisaged for the Shatrovskoye UGS facility, 0.34 billion cubic meters – for Novomoskovskoye and 0.5 to 0.6 billion cubic meters – for the Arbuzovskoye UGS facility.
Bednodemyanovskoye will be used as the basic UGS facility to cover seasonal fluctuations in Central Russia, particularly during cold snaps, and to secure gas exports.
The domestic UGS network is expanded with the Shatrovskoye UGS facility. Production wells drilling operations are scheduled for 2012. The Novomoskovskoye UGS facility will be constructed in a salt cavern with tasks similar to those of the Kaliningradskoye and Volgogradskoye UGS facilities. The Arbuzovskoye UGS facility will be solving tasks on increasing the reliability of gas supplies to the Republic of Tatarstan.
- Underground gas and helium concentrate storage facilities construction is scheduled in Eastern Siberia and the Far East as part of the Eastern Gas Program implementation. Are there any studies being performed for construction of these facilities? What are the facilities planned for construction and have any specific structures been selected yet? What activities are scheduled for 2011–2015 to develop the UGS system in Eastern Russia?
We are searching for the geological structures in Eastern Russia suitable for UGS facilities construction. A salt caverns prospecting license is currently being issued in the Irkutsk Oblast in order to construct the Angarskoye UGS facility. It is planned to drill five exploration wells in the near future. Exploratory drilling is to be completed soon in the Tomsk Oblast to construct the Tatyanovskoye UGS facility. The Investment Plan has been developed for the Malositenskoye UGS facility construction in the Khabarovsk Krai, the first exploration well drilling is commenced with seismic survey being prepared. A considerable amount of seismic operations is scheduled for 2011–2015 to explore the structures suitable for UGS facilities construction in Western Siberia and the Far East.
As to the helium concentrate storage – according to the pre-investment studies, the options will be considered to select the most suitable geological structure for a helium storage facility creation in the vicinity of gas production and treatment facilities – the Chayandinskoye, Tas-Yuryakhskoye and Khotogo-Murbaiskoye fields.
- How expedient was the creation of a special purpose company, Gazprom UGS? What tasks are assigned to this company in order to develop the domestic gas storage sub-sector?
At the moment, being one of the largest companies in Gazprom Group, Gazprom UGS comprises 16 directorates for underground storage, 4 directorates for well workover, rescue and recovery operations, and the engineering center. Creation of a special purpose company to run UGS facilities in Russia enabled transparent rates in this business segment. The efficiency of the company’s investment program implementation increased. Was the creation of such a company expedient? The answer can only be affirmative.
The main tasks we assign to Gazprom UGS consist in meeting the requirements of other Gazprom’s companies for cost effective gas storage, injection and withdrawal from the UGS facilities. The existing facilities must be maintained in working order with timely routine maintenance and overhaul repairs, thus ensuring reliable and safe operation of all process equipment at a UGS facility.
- What are the key strategic objectives pursued by the UGS system development abroad?
We will build up UGS capacities abroad. Our reference point till 2030 is to reach the working gas volume of at least 5 per cent of the annual export supplies with the priority given to creation of own storage facilities.
- Has the Nord Stream gas supplies support system been completed in terms of UGS facilities in Russia and abroad? Where should domestic and foreign UGS facilities be located to support gas supplies via the South Stream system?
There is a following system solution for Nord Stream: wider use of currently reconstructed and new UGS facilities in the Central and Northwestern regions – Kasimovskoye, Uvyazovskoye, Kaluzhskoye, Shchelkovskoye, Bednodemyanovskoye, Skalinskoye and Nevskoye. The Bergermeer UGS facility in the Netherlands and Katharina in Germany are created to this end. As is known, the final investment decision on the latter has recently been signed.
The Severo-Stavropolskoye and Kushchevskoye UGS facilities will be pivotal in Russia while the Haidach UGS facility in Austria with stage two (final) completed and the Banatski Dvor UGS facility in Serbia will be used abroad to ensure sustainable gas supplies by the South Stream gas pipeline system.
- What UGS facilities are scheduled for construction abroad between 2011 and 2015? Will the Company implement the UGS construction project in Saltfleetby?
Until 2011 it is planned to carry on constructing Banatski Dvor in Serbia, Bergermeer in the Netherlands and Katharina in Germany. Besides, we are engaged in intensive negotiations on the Saltfleetby UGS facility construction in England and Damborice in the Czech Republic.