February 21, 2019

Published in corporate Gazprom Magazine Issue 1–2, interview conducted by Denis Kirillov

Oleg Aksyutin, Member of the Gazprom Management Committee and Head of Department at Gazprom, answers questions from Gazprom Magazine

Mr. Aksyutin, please tell us about the history of innovative development at the Gazprom Group.

The term “innovation” appeared relatively recently in Russia. Innovation is traditionally understood as adopting a new or greatly improved product (service) or process, or a sales or organization method in your business, workplace management or external relations.

Under this definition, innovations have been an integral part of Gazprom's work since its foundation. Constant changes in the external and internal environment lead to challenges that demand our response: solving scientific and technical issues, refining the way we cooperate with our contractors, changing the existing organizational processes, and so on.

Management system

The Company's innovation management system involves long- and medium-term planning, the development of operational activities, investment management, interaction with suppliers and manufacturers, and the management of research and development and experimental engineering works, all of which serve as the basis for our annual R&D Program.

The first policy regulating the Company's long-term innovation planning and management was the Innovative Development Program until 2020 approved in June 2011 by the Gazprom Board of Directors.

The Program covers the Company's gas, oil and electric power businesses. It comprises a set of interrelated activities aimed at developing and implementing new technologies, innovative products and services that meet and exceed international standards, and at creating favorable conditions for the advancement of innovation both at the Gazprom Group and in the related fields of Russian industrial production.

In accordance with the requirements of federal executive bodies, the Government Commission on High Technologies and Innovations, and the Presidential Council for Economic Modernization and Innovative Development of Russia, Gazprom constantly monitors and updates its Innovative Development Program. The Company is now using the edition of the Program that was approved by the Board of Directors in 2018.

What are the main provisions of the Gazprom Group's innovation strategy?

The innovation strategy is connected to the Group's Long-Term Development Program. Let me remind you that our strategic goal is to preserve Gazprom's position as the world's leading energy corporation through diversifying our sales markets, guaranteeing reliable supplies, enhancing operational efficiency, and using latest sci-tech solutions.


How is this innovation policy implemented in each area of Gazprom's work?

Let's start with the gas business. A total of 75 R&D solutions in this area were obtained between 2016 and 2018. Our innovations in geological exploration are associated with the development of the Chayandinskoye oil, gas and condensate field and the Kovyktinskoye gas and condensate field, various fields in the Yamal Peninsula, the Sakhalin II project, and the oil and gas resources of the Yamal shelf in the Kara Sea. This also includes our continuing comprehensive work to create a method for the electromagnetic sensing of gas and oil deposits using ultra-short high-intensity impulses to explore the area around the well, and our efforts to develop a set of specifications for the software used in prospecting, exploring and developing deposits as part of the digitalization of Gazprom's core technological processes. This way, through the method of comprehensive analysis of geophysical logging data in structurally complex reservoirs of various oil- and gas-bearing plays in Yamal, we have adopted requirements for processing geological and geophysical data from the Neocomian-Aptian complex so as to ensure that modern technologies are used to assess the volumes and level of filtration in these reservoirs.

The application of lithologic and petrophysical models of deposits of key exploration targets in the Rusanovskoye, Leningradskoye and Kruzenshternskoye gas and condensate fields will increase the reliability of the assessment and justification of the development of oil and gas resources in the Yamal shelf of the Kara Sea.

Gas production

Since 2016, over 160 R&D solutions have been received in this area. Innovations in the development of gas fields are aimed both at improving efficiency in the use of existing deposits and at developing hydrocarbon reserves in new gas production regions, including the continental shelf of the Russian Federation.

In particular, the technologies for the development of gas and gas condensate wells going to water, which involve the use of solid and liquid surfactants and concentric lifting columns, will be applied at the fields based in the Nadym-Pur-Taz region that are at the final stage of development. The creation of domestic fracking fluids for the gas condensate and oil wells of the Urengoyskoye oil, gas and condensate field helps intensify hydrocarbon production using hydraulic fracturing in a more efficient manner.

The membrane technology created for helium separation from natural gas is going to be used in the development of Chayandinskoye to produce helium concentrate and store it long-term in the pay

The membrane technology created for helium separation from natural gas is going to be used in the development of Chayandinskoye to produce helium concentrate and store it long-term in the pay. In 2017, Gazprom started implementing a project focused on constructing a membrane helium separation unit with a design gas processing capacity of 32 billion cubic meters per year.

Efforts are underway to enhance the operational reliability of subsea production facilities and stationary platforms by reducing the potential negative effects of seismic impacts in the waters of the Yuzhno-Kirinskoye field and fields with a similar infrastructure.

Gas transportation and storage

Meanwhile, in order to ensure highly reliable and uninterrupted gas supplies, Gazprom is constantly improving the technologies and equipment used in the transportation and storage of gas when implementing new gas transmission projects and maintaining reliable, uninterrupted and efficient operation of Russia's Unified Gas Supply System.

We continue refining the technologies, materials, and technical solutions used in the construction and operation of the Bovanenkovo – Ukhta gas trunkline system, which is a unique complex operating in extremely adverse environmental, climatic, and geological conditions with limited accessibility during certain seasons.

We are applying the most cutting-edge and knowledge-intensive technologies and equipment in the construction of the Power of Siberia gas trunkline, namely the domestic fast-acting axial anti-surge valves and control valves that were specially designed as part of the R&D Program and are highly reliable and as good as their foreign counterparts. There is also the automated portable radioscopic scanner for weld testing certified for top-level operations with 1,020–1,420-millimeter diameter pipes. There are digital radio relay stations for use in adverse weather conditions. There is a smart monitoring system for cathodic pipeline protection that ensures the optimal management of its protective capacity and lowers power consumption.

Technologies for overhauling engines of gas compressor units (GCUs) and extending their service life will help cut down capital investment in the replacement of GCUs. The use of portable high-performance modular compressor units with gas turbines with a capacity of 60,000 cubic meters per hour will prevent outgassing during maintenance works on gas trunklines.

The technology for selective use of a storage facility by dividing gas flows in UGS wells makes operations in underground storage facilities much more efficient

The technology for selective use of a storage facility by dividing gas flows in UGS wells makes operations in underground storage facilities much more efficient.

As an alternative to the existing ways of delivering natural gas in a liquefied or compressed form, there is a method of transporting and storing (accumulating) gas in an adsorbed form. This method is based on the use of nanoporous carbon materials with sorption capacity (methane sorbents). This mode of natural gas transportation and storage offers a number of benefits from the viewpoint of operational safety and energy efficiency: it allows for storing and transporting bigger volumes of natural gas at a lower pressure, and provides for enhanced fire and explosion protection as the gas is stored and transported in a porous system in a bound state.

One of the key objectives in this area is researching other potentially useful materials, such as various modified metal-organic frameworks, supramolecular structures formed of carbon nanotubes, graphene, peat and others to identify the most financially and technologically efficient methane adsorbents.

Over the past three years (2016–2018), some 200 R&D solutions were developed in the field of gas transportation and storage.


In the area of hydrocarbon processing, a series of laboratory studies and pilot tests has been carried out to test the technology for the hydroconversion of heavy oil residues using nanosized catalyst particles.

A paraffin inhibitor has been developed and put to use with a view to boosting the productivity of gas condensate transportation. A set of technical and technological solutions has been created to increase the intake of Achimov condensate at the Urengoy Condensate Treatment Plant. A total of 23 R&D solutions have been obtained in this area over the past three years.

Oil business

The innovative development of the Gazprom Group's oil business is focused on the creation of technologies ensuring that we achieve our strategic goals, namely a cost-effective increase in production and the use of advanced technologies in oil refining.

One of the key targets in the innovative development related to achieving a cost-effective increase in production is to improve the efficiency of drilling, namely horizontal drilling techniques (increasing the length of horizontal well sections and the number of stages in fracking), as well as technologies that involve raising the number of laterals in multilateral wells.

Among the promising tools to boost drilling efficiency are smart assistants based on machine learning technologies. They make it possible to devise recommendations on the basis of large volumes of retrospective data. Joint projects in this area with both domestic and foreign contractors have already been launched, including an agreement with IBM that provides for the development of tools for determining the lithology of wellbores during drilling.

If the project for the creation of technologies to develop the Bazhenov formation proves successful, it will give us an opportunity to explore new reserves and create up to 10,000 jobs in the mechanical engineering sector and up to 6,000 jobs in oilfield services

In 2017, the Gazprom Group's project for the creation of technologies to develop the Bazhenov formation was given national status, which proves its importance for both the oil and gas industry and the country at large. If the project for the creation of technologies to develop the Bazhenov formation proves successful, it will give us an opportunity to explore new reserves, create up to 10,000 jobs in the mechanical engineering sector and up to 6,000 jobs in oilfield services, implement import-substituting technologies and equipment, and resume active operations in the long-established production regions. Moreover, technological solutions and competences acquired in the project may be used in the development of other hard-to-reach reserves in Russian territory.

With regard to using advanced technologies in oil refining, the Company is working to create a catalyst plant in Omsk where catalysts for catalytic cracking, hydrotreatment and hydrocracking will be produced.

Could you tell us about some other innovative solutions that have been created for the Company's oil business?

The underbalanced drilling technology has been used for the first time at the Archinskoye field. This technology allows us to discover a lot of naturally occurring cracks and improve productivity in fractured carbonate reservoirs. The new well's flow rate is 160 tons of oil per day, almost twice as high as the average rate for similar wells, and it completely justifies the expenses of adopting this complex and high-tech solution. Based on the results achieved at the Archinskoye field, this technology is going to be used at other fields with fractured carbonate reservoirs.

Twenty-step hydraulic fracturing with non-spherical particles has been used for the first time at the Novoportovskoye field. The well's initial daily flow rate totaled 188 tons of oil. This method will be deployed while developing hydrocarbon deposits in the Yamal Peninsula.

Novoportovskoye was also the first Russian field where a well with four horizontal cased holes was built. For its construction, Gazprom used domestic equipment that was modified in view of the geological conditions specific to this field. Multilateral horizontal wells make it possible to expand the drainage area and boost production without drilling additional vertical wells.

Intellectual property management

Most of the solutions I have mentioned are patented by the Gazprom Group or are currently undergoing the patenting process.

Gazprom is actively working to obtain patents for its innovative solutions outside of Russia. These efforts have resulted in a total of 23 patents obtained abroad since 2015. These patents were acquired in the countries known for their technological leadership, namely in Japan, China, Germany, the Netherlands, France, and the United Kingdom.

What funds have been earmarked by Gazprom for its Innovative Development Program until 2025?

The amount of funds that we plan to spend on the R&D stage of innovative projects corresponds to 0.1–0.2 per cent of our revenue, while the total amount of funding in absolute terms will exceed RUB 80 billion. The investment stage of our innovative projects is carried out within the framework of the three-year investment program adopted by Gazprom.

The scientific and technical potential accumulated in the past will make it possible to provide over RUB 2.8 trillion in capital investment for investment projects that involve innovative technologies in the gas sector from now until 2025. In addition, the estimated amount of funding towards Gazprom's projects focused on creating experimental production plants and units will reach some RUB 3.8 billion in the same period.

Meanwhile, it will take about RUB 42 billion to implement the technological strategy, develop innovative infrastructure, create a “digital” refinery, and execute energy efficiency programs in the oil business. In the power business, investments in the projects involving innovative technologies are estimated at around RUB 180 billion.


What focus areas of innovative development of the Gazprom Group do you consider promising?

There are many promising areas. Take, for instance, the adoption and implementation of hydrogen technologies. Hydrogen is becoming increasingly popular these days. Hydrogen and hydrogen-based energy sources have great potential as a means of transitioning to the so-called low-emission economy. For Gazprom, the production and use of methane-hydrogen mixtures and hydrogen is a promising avenue for diversifying and enhancing the efficiency of using natural gas.

The groundwork for this activity was laid several years ago, when extensive efforts were launched to formulate new environmental requirements for equipment and implement the principles of using the best available technologies. Gazprom made the right strategic decision when it started to improve the environmental characteristics of its gas compressor units. Various technological solutions were analyzed and tested. Our goal was to reduce emissions and raise the efficiency of gas turbine units.

Moreover, the entry into force of the Paris Agreement on climate change, as well as the need to increase Gazprom's competitiveness in the global markets, has made hydrogen a key priority.

Two innovative projects aimed at producing methane-hydrogen fuel as a fuel gas for compressor units through adiabatic conversion of methane are currently underway in Samara and Ufa

Two innovative projects aimed at producing methane-hydrogen fuel as a fuel gas for compressor units through adiabatic conversion of methane are currently underway in Samara and Ufa. The resulting fuel saving is expected to reach 5 per cent, with reductions in harmful СО2 emissions by 30 per cent and in pollutants such as NOx by 4.5 times and СO by 5 times. The technology has been patented in Russia, Japan, South Korea, China, and the United States. The next step is to arrange for the batch manufacturing of equipment modules (standardized) producing methane-hydrogen fuel, as well as the rollout of this technology at the facilities of Gazprom.

In addition, Gazprom is working to create entirely carbon-free technologies for producing hydrogen from natural gas. We see potential in the innovative solution for breaking down natural gas into hydrogen and carbon in unbalanced low-temperature plasma. This solution does not produce CO2 emissions. It looks particularly promising. On the one hand, it could help us produce low-carbon hydrogen for the power sector, and on the other hand, it could give us valuable carbon materials for the chemical industry.

Similar research based on methane cracking is being undertaken by our European colleagues from the Karlsruhe Institute of Technology and the Institute for Advanced Sustainability Studies in Potsdam. Technologies of this kind appear to be more attractive financially than those involving water electrolysis.

I would like to note that these provisions are described in detail in Gazprom's official feedback on the Strategy for long-term EU greenhouse gas emissions reduction to 2050, and they can be found on the official website of the European Commission.


Do helium technologies show promise as well?

In terms of their wide use in Russia, definitely. In 2017, global helium production showed no change from the previous year and amounted to 160 million cubic meters. Asia-Pacific remains the main consumer of helium (44 per cent of the global total in 2017). The largest importer is China, which actively buys gas from Qatar and the United States.

Russia has substantial prospects in the helium industry, since our country holds 29 per cent of the world's helium reserves. Qatar comes second, followed by the United States and Algeria. In the coming years, we plan to create Russian capacities to produce helium commercially at the Amur GPP. Production will be launched in 2021 and will reach the annual rate of 60 million cubic meters by 2026–2027.

The basic technologies for helium extraction involve low-temperature condensation at a high pressure with subsequent separation of the resulting liquid and further adsorption cleaning to remove trace substances from gas at a temperature no higher than minus 194 degrees Celsius. This energy-intensive process requires large amounts of liquid nitrogen. Moreover, after passing through condensers, helium has a residual nitrogen content of about 1 per cent, which necessitates low-temperature adsorption cleaning at a later stage.

Meanwhile, Gazprom VNIIGAZ, the main research institute of Gazprom, has developed a number of technical solutions to optimize the process of purifying helium and producing it in gaseous form. Firstly, low-temperature nitrogen condensation will be replaced by short-cycle heatless adsorption. This helps reduce the use of liquid nitrogen, cutting operating costs and the cost of production as a result. Secondly, it is suggested that a membrane be used in the unit for removing nitrogen from the helium concentrate after the short-cycle heatless adsorption is completed. This will improve productivity and increase the recovery rate of target components in the gas mixture.

A promising direction in the optimization of the helium condensate purification process (catalytic oxidation stage) is the development of new hydrogen and methane oxidation catalysts helping considerably reduce helium losses. Leading Russian research institutes are working towards this goal, and they already have some solutions.

The advancement and implementation of new domestic helium production technologies will allow Gazprom to enhance the economic efficiency of helium production facilities.

Gas hydrates

How much potential does gas hydrate production offer at present?

The prospects for the replenishment of global gas reserves are largely related to the development of unconventional gas sources. As of now, Russian producers of the blue fuel have substantial reserves of conventional gas at their disposal.

In most cases, the prospecting, exploration and production technologies used with conventional hydrocarbon reserves are either inapplicable or uneconomic when it comes to hydrate gas. In order to develop this segment of the Russian gas sector, we will have to create the scientific and technological foundation to develop gas hydrate deposits based on the existing international practices. The underlying issues concerning the feasibility of gas hydrate production include the geological, petrographic and resource characteristics of gas hydrate deposits, as well as their remoteness from potential consumers and the competitiveness of hydrate gas in various areas with conventional hydrocarbon reserves.

Speaking about the Gazprom Group, I would like to note that gas hydrates have been a focus of Gazprom VNIIGAZ for over 50 years. Since 1966, the institute's researchers have been conducting studies in this area and have proved that gas hydrate deposits can occur in nature. In 1972, they retrieved and analyzed core samples of hydrate-saturated rocks during bottom sampling in the deep-water areas of the Black Sea. Gas hydrate inclusions were observed in the cavities of bottom soil samples. It was effectively the first-ever officially recognized scientific observation of gas hydrates naturally occurring in rocks.

Vigorous efforts continue to be made in this regard. The global and domestic reserves of hydrate gas have been assessed, the areas in which hydrate-saturated rocks occur have been mapped, and the top priorities for pilot development have been determined. Combined research expeditions have been sent to Lake Baikal and the northern part of Western Siberia to study naturally occurring gas hydrates. Gazprom's employees have authored a number of industry-specific policy papers concerning potential development of gas hydrate deposits. That said, it will take quite a long time for the development of gas hydrate deposits to become economically viable.

Current agenda

Today, we have a whole range of promising activities on our agenda. These include offshore hydrocarbon exploration and production; methods of increasing oil and gas recovery; further development of fields containing Cenomanian low-pressure gas; development of deep-seated hydrocarbon deposits; digital modeling of fields, underground gas storage facilities and subsea hydrocarbon production systems; processing of feedstock with complex composition; increase in hydrocarbon conversion efficiency; development of NGV technologies; promotion of LNG; and, of course, improvement of gas transportation technologies.

I would like to focus in particular on the digitalization of technological processes. Digital technologies have already become an intrinsic part of our world, and a company cannot achieve leadership without intelligent control and management systems. Our focus areas in this regard include modeling and experimental testing of processes taking place in a natural environment, development of software for processing and interpreting geological and geophysical data, and so on. These solutions will help us generate virtual images of facilities, thereby accelerating the processes of designing new equipment prototypes, engineering, and construction. Moreover, artificial intelligence could help us make a breakthrough in the modeling of evolving gas markets.

In view of the enormous distances between our new production centers and key sales markets, innovations have become crucial, especially in terms of efficiency of delivering raw materials to consumers. For instance, we take great pains to improve inner coatings in pipes and raise their inner pressure, as it helps boost the commercial throughput of gas trunklines and increase energy saving.

Seventy per cent of energy efficiency and eco-friendliness demonstrated by our gas pipelines comes from using more cost-effective gas turbine units and centrifugal gas compressors. Gazprom has implemented a new type of unique compressor stations – so-called coastal stations that are built next to offshore gas pipelines. These stations operate with increased working pressure of up to 28 MPa and are equipped with gas dehydration units, CS safety systems, and protections for pressure and outlet gas temperature. We are successfully adopting and implementing all of these innovations together with domestic pipe and machine-building companies.