Gas in perspective

April 27, 2020

Published in corporate Gazprom Magazine Issue 4, interview conducted by Sergey Pravosudov

Oleg Aksyutin, Deputy Chairman of the Gazprom Management Committee, answers questions from Gazprom Magazine

Mr. Aksyutin, there is much talk in the world about the necessity of completely stopping the use of hydrocarbon fuel. Is this idea practicable?

Let us proceed from reality. Considering the current state of the art in engineering and technology, a complete phase-out of hydrocarbon fuel seems more like a matter of imagination in the foreseeable future. A shift to zero-carbon technologies implies a large-scale electrification (in some scenarios, 100-per cent electrification) with the use of renewable energy sources (RES). The development of RES is not possible without large power storage capacities, nor is it possible without using sizable areas both on land and at sea (in the case of offshore windmill farms), which necessitates substantial investment, increases the dependence on weather conditions, and disrupts the existing ecosystem. This is why, taking into account the engineering and economic reasons I have just outlined, it is hard to even imagine at this juncture how to maintain an uninterrupted power supply based exclusively on RES without the use of hydrocarbons.

Besides, according to the latest UN forecast, the world population will increase by 2 billion people in the next 30 years. In this context, it has to be noted that currently one in five people in the world does not have access to electric power, and around 3 billion people still use firewood and other biomaterials for cooking and heating. In the long term, decent living conditions for these people can only be provided on the basis of fossil energy sources, and natural gas is the cleanest of these sources.

The civilization is evolving, and more and more energy is being used in the world. The increase in global population, the growth of the world economy, the creation of new production facilities and the expansion of existing ones, along with the continuous growth of vehicle fleets, are the reasons behind the ever-increasing demand for energy. And a stable energy supply is required.

In the current circumstances, this target is to be achieved, inter alia, with due consideration of the climate agenda for the reduction of greenhouse gas emissions. In a number of countries, the promotion of renewable energy has become the most popular tool to meet this target. Due to a wide range of state support measures, the total investment in the renewable energy sector around the world has exceeded USD 4 trillion in the last 15 years, according to the Bloomberg agency. Within the same period, the installed capacities of windmill farms and solar power plants have grown 17 (!) times and amounted to over 1,000 GW. At the same time, despite an investment of such scale, there is still a global rise in greenhouse gas emissions.

It is obvious that the development of the renewable energy sector cannot alone solve the task of controlling and reducing emissions, even if we speak about the energy sector only. Other approaches are required. Despite the repeated statements about the policy of phasing out the “dirtiest” energy sources, the countries that reduce power generation from renewable sources often compensate for the energy shortage by coal-fired power generation. This means that they produce energy from the “dirtiest” type of fossil fuel, i.e. coal. Nuclear energy is no longer considered an option for “supporting” renewable energy either, although it produces zero emissions.

The extended use of natural gas can, and should, become one of the main ways to meet the climate targets, as natural gas is the only energy carrier able of providing both energy security and sustainable development on a global scale.

Uninterrupted energy supply and energy security directly depend on the availability of sufficient energy storage capacities and backup power, and the best possible and the most economically feasible methods of storing energy and providing supplies during peak consumption are the use of UGS facilities and gas-fired power generation.

The use of natural gas in parallel with renewable energy development is also effective in terms of climate impacts. If we objectively look at carbon footprints, i.e. greenhouse gas emissions throughout the entire production chain, we will see that, for example, the carbon footprint from the production of solar panels in China with their subsequent transportation to the EU is comparable to the footprint of coal-fired power generation. The carbon footprint from the use of natural gas is much lower.

It is obvious that the extended use of natural gas is the most rational option in terms of developing an integrated approach to addressing the two challenges, i.e. the provision of a reliable energy supply and the reduction of harmful emissions.

RES and gas

It is often said that renewable energy is becoming more effective than conventional energy. Do you agree with that?

The renewable energy sector has a disadvantage that is critical in terms of energy security of a country or region: the lack of stability in power generation and a high dependence on weather conditions.

In windless (or stormy) and cloudy weather, the generation of electricity at renewable energy plants can drop to critical levels very fast. This happens so often that in Germany there is already a special term for this phenomenon: Dunkelflaute. As a result, the need arises to make up for the idling renewable energy capacities through, inter alia, a significant increase in coal use, which has a negative environmental impact. It has to be pointed out that situations of this kind happen regularly even in the countries that are global leaders in renewable energy, such as Germany and Denmark.

Apart from that, the renewable energy sector has other serious disadvantages:

  • heavy load on energy systems at the time of sharp drops in power generation caused by weather changes, which results in rotating power outages (blackouts);
  • the necessity of allocating large areas of farming land for the construction of windmill farms or solar power plants;
  • the necessity of creating an electric power storage system with a capacity sufficient to provide backup for the generation facilities;
  • high dependence of the renewable energy sector on the mining and processing of rare metals (lithium, nickel, cadmium, etc.);
  • the growing problem of treatment and disposal of used materials, especially solar panels;
  • the negative impact on ecosystems resulting from the expansion of windmill farms and solar power plants.

All of these disadvantages may become critical after a boost in renewable energy development.

We have nothing against renewable energy when it brings some real benefits. For example, we, as a gas company, support the use of alternative and renewable energy sources at our facilities located in technologically isolated areas, as this is economically and technically feasible. But how can one talk about efficiency in the situations when substantial investment is used to satisfy political ambitions, undermining the competitiveness of national economies to the disadvantage of the people?

The single greatest reason for the promotion of renewable energy is a false sense that RES provide energy independence, primarily independence from hydrocarbons. But one has to understand that the growth of the installed capacity of windmill farms and solar panels brings on a sharp increase in the consumption of rare earth metals, precious minerals, and plastic (for example, neodymium and dysprosium play a strategic role in the production of wind turbines). In the absence of considerable domestic reserves of rare earth metals, there will be a dependence either on the suppliers who possess strategic reserves of those resources (such as China) or the suppliers who produce the required equipment.

The strategy of achieving 100 per cent electrification on the basis of renewable energy has a conceptual obstacle. At the present time, the climate is changing. One can argue about the reasons behind this, but a certain trend is evident. If a complete shift to renewable energy sources is implemented, both the energy industry and the economy as a whole will become dependent on weather events, including those triggered by climate change. Metaphorically speaking, the foundation of the future energy model will be installed on shaky and unstable ground, which will pose a threat to energy security.

The use of solar power and power storage systems brings up the issue of safety in applying toxic substances (the production of silicon and arsenides is a hazardous chemical process). The use of solar thermal power stations significantly increases the ambient air temperature, resulting in deaths of the birds flying over the area. Large-scale use of wind power necessitates a boost in the production of aluminum and glass-reinforced plastic, which is quite pollution-intensive. The low-frequency noise generated by wind turbines disorientates animals and insects, causing their deaths. Wind generators are also a source of radio interference, because the blades rotate with a frequency similar to the synchronization frequency of TV and radio signals, which creates a threat for the population and national security. Besides, the disposal technologies for wind generators and solar panels that reach the end of their operating life have not been put into wide practice yet; most of the used wind generators and solar panels are actually just stored at landfills.

In my opinion, there should be no competition between energy sources when it comes to human health, human safety, and the need for affordable (low-cost) energy. Our task today is to create an effective energy system for the future generations using the principle of technological neutrality and the advantages of various energy sources. For the foundation of this system, we should use an energy resource that conforms to the criteria of “affordability,” “uninterrupted energy supply,” and “environmental safety.” Natural gas conforms to all of these criteria, and a partnership with the renewable energy sector could generate a positive synergy.

Will the share of gas in the global energy mix increase?

Coal, oil and gas cover about three quarters of humanity's need for energy resources. We expect that the consumption of natural gas will outrun the consumption rates of its “competitors,” i.e. oil and coal, and, therefore, natural gas will become the only fossil energy source whose share in the global energy mix will increase in the long run. This is related to the economic and environmental advantages of natural gas in the context of the growing importance of climate policy in most countries of the world.

It is our opinion that major growth in the demand for natural gas will be observed in Asia, primarily in China, whose government has set the goal to reduce coal consumption. Gazprom is building its strategy with this factor in mind. At the end of last year, we brought onstream the Power of Siberia gas pipeline, which is now delivering Russian gas to China. By the way, the contract we signed with China is the largest contract in the history of the gas sector. We estimate that by 2025 Power of Siberia might be able to provide a third of China's additional demand for natural gas that will be observed after 2019. We are currently holding negotiations on new projects with our partners from China.

As for Europe, the demand for gas can be expected to increase in the medium term. The increase will be facilitated by such factors as the phase-out of coal-fired and nuclear power plants, as well as the enhancement of environmental standards in the power and transport sectors. At the same time, indigenous production in European countries is predicted to decline, and this may expand Gazprom's market niche for gas.

Natural gas is a unique energy carrier facilitating the achievement of sustainable development goals. The world's natural gas reserves are sufficient to provide the economy with energy for many decades to come; the ongoing development of gas transmission infrastructure enhances energy supply security; and the eco-friendliness intrinsic to natural gas contributes to the reduction of harmful emissions.

This is why experts worldwide agree that the use of natural gas has excellent prospects. According to forecasts, the global consumption of natural gas will rise steadily.

Warming or cooling?

Scientists continue to debate whether our planet is going to experience global warming or global cooling. Which of these points of view seems more sound to you?

This is a very complex question. As the President of Russia has pointed out, no-one knows the actual reasons behind the global climate change, and there have been periods of both warming and cooling in Earth's history: “This may be due to global processes in the Universe.”

Indeed, although winter in central Russia was unusually warm this year, and it is obvious what any common person in that region would say about climate change, scientists say that the current climate trend is not warming but cooling. For instance, according to the research works of the European Organization for Nuclear Research (CERN), the long cold minimum is expected to hit about 2040; according to the studies of the Central Astronomical Observatory of the Russian Academy of Sciences at Pulkovo, it is expected to occur about 2050; and according to American climate scientist John Casey of NASA – in about 30 years. It should be noted that abnormally warm winters have already happened in the past. Let us remember the lines from “Eugene Onegin,” the famous novel in verse by Alexander Pushkin: “Expecting winter, nature waited – only in January the snow, night of the second, started flaking.”

–°limate modeling, upon which most of the planet's climate change theories are based, is a complex process highly dependent on primary data selection and assessment methods, as well as on the technical capabilities of computational tools. As yet, none of the climate models existing today can be considered definitive from a scientific point of view.

Today, we see that climate change has become a powerful political and economic tool. I tend to think that in this regard the position closest to the truth has been expressed by a global network of 700 scientists and professionals specializing in climate and related fields, who sent the following message to the UN: “Climate science should be less political, while climate policies should be more scientific. Scientists should openly address the uncertainties and exaggerations in their predictions of global warming, while politicians should dispassionately count the real benefits as well as the imagined costs of adaptation to global warming, and the real costs as well as the imagined benefits of mitigation.”

Is carbon dioxide really an absolute evil (it is vital for plants, after all)?

It is a popular theory nowadays that the increasing concentration of atmospheric CO2 is the reason behind the global temperature rise. The current concentration is over 400 parts per million. Is it bad or good? Let us ponder over this issue, and I am going to refer to scientific facts for this purpose.

As everyone knows from school, carbon dioxide is used in photosynthesis and plays a role in the shaping of Earth’s climate. A number of foreign and Russian scientists point out that the anthropogenic theory cannot explain such obvious facts as the “pause” in global warming observed after 1998 despite the increase in CO2 emissions, and, what is even more contradictory to the anthropogenic hypothesis, the global temperature decrease observed in 1940–1976 amid significantly increased emissions of CO2 and other greenhouse gases.

A radical opinion about the anthropogenic theory was expressed by Andrey Kapitsa (1939–2011), Corresponding Member of the Russian Academy of Sciences, Head of the Chair of the Environmental Management Department at the Faculty of Geography at Lomonosov Moscow State University: “This is a completely wrong and unscientific theory. Human activity has virtually no impact on the climate; in practice, its influence is very small as compared to that of major climate-influencing processes. The ability of carbon dioxide to cause the greenhouse effect is two orders of magnitude lower than that of water vapor.”

In 2016, Patrick Moore, past President of the Greenpeace Foundation in Canada, published a paper on the positive impact of carbon dioxide on the life on Earth. He pointed out that human history knows sharp dips in atmospheric carbon dioxide concentration. The last one took place 18,000 years ago, when carbon dioxide dropped to 180 parts per million, and most plant species were threatened with extinction. 150 parts per million is the critical threshold for the survival of plant life on our planet.

So, can we say that carbon dioxide, which ensures the survival of all life on Earth, is an absolute evil? It is thanks to CO2 that there is life on Earth.

Electric vehicles and natural gas in transport

How do you assess the prospects for natural gas as a vehicle fuel as compared to electric vehicles?

It is important to mention that the development of electric vehicles is backed up by large-scale lobbying activities and significant financial support. Major automobile manufacturers implement investment programs for a total of USD 120 billion aimed at producing new models of electric vehicles, as well as electric-vehicle batteries with more capacity. Unprecedented subsidies are granted for purchasing electric vehicles (up to EUR 8,000 per vehicle), as well as tax privileges, free parking, and so on. Electric vehicles and RES are aggressively promoted as the only way to solve environmental problems, and this even goes as far as to declare a full mandatory ban of vehicles that run on conventional fuels. Such a policy is potentially beneficial mainly to the manufacturers of the equipment required for the use of electric vehicles, especially electric-vehicle batteries.

However, the capacity of the electric vehicles market has natural constraints.

  • If we assume that all new vehicles produced worldwide since 2020 will be electrically powered, their share in the total vehicle stock in developed countries could be as high as 6.5 per cent of the passenger car fleet by 2030, provided that all cost and infrastructure barriers are overcome. In reality, it is hardly possible even to come close to this level.
  • Infrastructure constraints related to power grid expansion, environmental damage from battery disposal, and declining performance of electric vehicles at adverse temperatures are critical for developing countries. Electric vehicles can compete only in certain transport segments in developed countries, which can afford strict environmental regulations and subsidized consumption.
  • The cobalt and lithium markets are experiencing resource constraints (shortages are expected in 2024 and 2026, respectively), which is a factor that can hold back growth in battery production and hamper battery cost reduction.
  • A highly important factor for heavy-duty vehicles that travel long distances is driving range. Here again, electric transport is not the best choice. The need for constant recharging dramatically reduces the commercial appeal of electric vehicles for long-haul freight transportation.

At the same time, LNG-powered freight trucks with over 1,500 kilometers of driving range are already available on the market, not to mention that natural gas offers both economic (even in gas importing countries, the cost of natural gas-based fuel per kilometer driven is lower than that of conventional fuels for the same distance) and environmental advantages.

Conversion of vehicles to methane can be an efficient solution to environmental problems. According to our estimates, greenhouse gas emissions from natural gas throughout its full lifecycle as a fuel, from production to consumption, are four times lower than those from gasoline. When combusted, methane does not produce solid soot particles, which have a most devastating impact on human health, and therefore, the use of methane in transport brings tangible improvements in people's health, not just in printed reports.

Given that methane is the most effective feedstock for hydrogen production, ensuring consumer access to gas filling infrastructure lays essential groundwork for transitioning to the use of hydrogen as a fuel. Relevant technologies for effective use of methane-hydrogen mixtures, including in transport, are already available. Therefore, NGV market development is a highly promising segment of the transport sector.

Today, methane is used as a vehicle fuel in more than 80 countries around the world. The global stock of methane-powered vehicles is around 28 million units, having increased by 1.6 million units in a year, which is comparable to the growth in the electric vehicles sector.

Despite the intrinsic advantages of natural gas as a fuel, market stakeholders have a lot of work to do in terms of advocating for this type of fuel and ensuring that potential consumers are properly informed. The proactive and concerted efforts of market players to promote methane as a vehicle fuel could secure a significant share of the alternative fuel segment for gas-based fuel thanks to its consumer properties. Additional demand for natural gas as a vehicle fuel may reach some 150 billion cubic meters across the world.

The benefits of natural gas as a vehicle fuel are obvious not only as regards motor vehicles but also for many other types of transport. For instance, there has been a significant increase in using this type of fuel for marine bunkering lately.

As for electric vehicles, it is necessary to analyze the full cycle of a vehicle of this type – from the receipt and processing of battery elements (lithium, cobalt, etc.) to their recycling and disposal. It has to be noted that, according to German researchers, electric vehicles can generate more CO2 emissions than diesel-powered ones (taking into account electricity production). To charge electric vehicles in cities and towns, additional power generating capacities need to be allocated. The news about changes in tariff setting by one of the largest electric vehicle charging networks in Europe is illustrative in this regard. Electric vehicle owners are offered to pay not for charging, but for the amount of power consumed. It has been calculated that filling cars with gasoline would be cheaper for their owners in this case.

Hydrogen

Could you expand on Gazprom's plans concerning the production and use of hydrogen?

Hydrogen is commonly used in industrial processes at gas processing plants and oil refineries of the Gazprom Group, for instance, in the production of light oils.

With due account for newly emerging requirements to the carbon intensity of production activities, Gazprom runs comprehensive sci-tech projects aimed at generating technological innovations for the production and use of methane-hydrogen fuel in the Company's production operations (in order to reduce carbon footprint and improve the efficiency of Russian gas supplies), as well as technologies for separation of hydrogen from methane with no greenhouse gas emissions (aiming to diversify and improve the efficiency of pipeline gas).

To achieve these targets, the Company has engaged leading Russian universities and institutes of the Russian Academy of Sciences, as well as domestic engine-building enterprises.

Considering the extensive efforts to formulate new environmental requirements to equipment and adopt the principles of using the best available technologies, Gazprom initiated work to improve the environmental performance of gas compressor units (GCUs). Various technologies were analyzed and tested to meet the challenges of reducing emissions and enhancing the efficiency of gas turbine units. The adoption of the Paris climate agreement coupled with the need to increase Gazprom's competitiveness in the global markets has brought the hydrogen issue to the fore.

As part of hydrogen technology development, consideration is being given to the prospects of methane cracking in molten metals, plasma-chemical conversion of natural gas and pyrolysis, hydrogen storage and use methods, as well as hydrogen production from hydrogen sulfide (hydrogen sulfide conversion and plasma-chemical conversion), which, by the way, also makes it possible to address some environmental problems related to the extraction and processing of sulfur-containing gases.

I wish to note that the gas industry is already actively contributing to the development of the hydrogen power sector – today, 76 per cent of the world's hydrogen production is based on natural gas, with 205 billion cubic meters of feedstock gas used to maintain this level. We see enormous potential in natural gas with regard to this power sector considering not only the new requirements to carbon intensity of processes, but also other, equally important environmental requirements. In this connection, by decision of Gazprom's Scientific and Technical Council, the Company is planning to carry out comprehensive research to study the potential of low-carbon development in national economies through wider use of Russian natural gas and hydrogen energy sources based on it.

LNG and shales

What is Gazprom's strategy for LNG production?

We proceed from the fact that pipeline gas serves as the backbone of the global gas market and the guarantor of energy security, while liquefied natural gas plays a balancing role, providing for the flexibility of supply routes. In 2018, the share of LNG supplies was only 11 per cent, but by 2030 it will grow to 16 per cent.

In the next decade, gas supplies worldwide will continue to rely mostly on pipeline infrastructure, and there is no doubt that Gazprom will be the global leader in pipeline gas transmission. At the same time, Gazprom is a pioneer of the domestic LNG industry. In 2019, we celebrated the 10th anniversary of Russia's first LNG plant, which was launched as part of the Sakhalin II project. Today, we are considering LNG as a means to enter new remote markets. Gazprom is completing the construction of the LNG complex with the annual capacity of 1.5 million tons in the vicinity of the Portovaya CS, working on the establishment of an integrated complex with an export capacity of 13 million tons of LNG near Ust-Luga, and looking into the possibility of building the third production train at the above-mentioned LNG plant within the Sakhalin II project. With these ambitious projects, the Company could raise the share of LNG in its export portfolio to 10 per cent by 2030.

How would you rate the economic status of shale projects in the USA? Can we expect a significant growth in China's shale hydrocarbon production?

First of all, let me highlight that Gazprom routinely monitors shale gas industries around the world. We report the results to the Board of Directors on an annual basis.

In the course of this work, we have identified a problem associated with the economy of shale projects, inter alia, in the USA, the world's leading producer of shale gas. According to our estimates, if the US gas prices remain low, producing companies may begin scaling down their activities soon. The downturn is expected to start if Henry Hub prices fall below USD 85 per 1,000 cubic meters. In January 2020, the average gas price at this hub was USD 76 per 1,000 cubic meters. Falling oil prices may also take a toll on shale gas production. Stagnation of the US shale oil business directly affects gas production, since a large proportion of shale gas produced in the USA is represented by associated petroleum gas.

As for China, the scale and outlook of the shale gas industry in this country are fundamentally different from those in the USA. Firstly, shale gas accounts for a very small share of the Chinese gas balance, as opposed to the United States, where more than two-thirds of gas production comes from shale. In 2019, China's shale deposits produced a total of 15 billion cubic meters, which accounts for less than 10 per cent of the overall production and less than 5 per cent of national gas consumption (last year's gas production in China was 174 billion cubic meters, and consumption – 307 billion cubic meters).

Secondly, in China, only two major state-owned companies are producing gas from the country's shale deposits: China National Petroleum and Gas Corporation (CNPC) and Sinopec. Despite the government's efforts to leverage private investment in this industry, independent producers until recently have been cautious and hesitant to enter this capital-intensive and risky business, while the US shale industry hinges on privately-owned companies.

Finally, the geography of shale gas production in China is limited to only one gas-bearing basin located in the Sichuan Province. In other regions, shale gas resources can only be brought into development in the long term, if confirmed by geological exploration. For comparison, shale gas production is carried out in many regions of the USA.

Given the above factors, despite the ambitious plans of Chinese companies to step up production rates, independent experts do not expect shale gas production in China to rise above 50 billion cubic meters by 2030, which means that it is assessed to be 30–50 billion cubic meters below the current production target (80–100 billion cubic meters by 2030, according to the 13th five-year plan).

What are the prospects for scientific and technical cooperation between Gazprom and Chinese companies?

The scientific and technical cooperation between Gazprom and CNPC has lasted for over 12 years. In recent years, along with enhanced commercial ties, in particular, via the export-oriented Power of Siberia gas pipeline project, the scope of joint R&D activities has been broadened considerably.

As a rule, our collaboration with our partners is governed by three-year scientific and technical cooperation programs. The current program includes 11 technological fields with 35 items. Among them are commercial projects aimed at addressing challenges for specific gas production facilities in China and Russia, joint research, and experience sharing on issues of mutual interest.

The most intense efforts are being made to devise engineering solutions and tools for the efficient development of fields with complex porous-fractured reservoir rocks, extraction of coalbed methane, optimization of flooded well operation and production from multi-zone gas deposits, operation of UGS facilities, and many aspects of energy saving and environmental safety.

No less important is joint analysis and assessment of the gas market outlook, which helps improve the reliability of forecasting for planning the companies' operations.

The scientific and technical cooperation program involves leading research institutes of the companies: Gazprom's head R&D centers VNIIGAZ and NIIgazeconomika, as well as Petrochina Research Institute of Petroleum Exploration and Development on behalf of CNPC.

Together with our Chinese colleagues, we assess the results of our sci-tech cooperation as successful. And we have agreed to develop the next three-year program for 2021–2023.

Innovations

What are the main strategic thrusts of Gazprom's innovative development?

Today, Gazprom is active in a number of promising areas. These include offshore exploration and production of hydrocarbons; methods for enhanced oil and gas recovery; follow-up development of low-pressure Cenomanian deposits; development of deep-lying hydrocarbon deposits; creation of highly-precise digital models of fields, UGS facilities, and subsea hydrocarbon production systems; processing of feedstock with complex composition; enhancement of hydrocarbon processing efficiency; advancement of NGV technologies; and promotion of the LNG business. And, of course, considering the great distances from our new production centers to the key sales markets, we remain focused on enhancing gas transportation technologies.

I would like to draw special attention to the digitalization of production processes. Digital technologies are already an integral part of our world, and it is impossible to achieve leadership without intelligent control and management systems. Current trends in this area involve digital modeling and experimental studies of natural environmental processes, development of software packages for processing and interpreting geological and geophysical data, and so on. These R&D achievements will facilitate the construction of virtual images of production facilities, thereby accelerating the development of new machinery and equipment prototypes, engineering, and construction. In addition to that, artificial intelligence could allow us to make a breakthrough in the modeling of gas market evolution.

What is the economic effect of innovations?

The potential economic benefit from implementing R&D results is among the most important indicators from the very beginning of the innovation process, when we determine the new R&D thrusts. At the stage preceding the commercial application of a ready R&D project, the economic aspect becomes even more important. Gazprom has a permanent Commission for introduction of innovative products.

A recent decision issued by the Commission was to approve the signing of an energy service contract to deliver, starting from 2020, a project for the use of high-efficiency replaceable flow parts of centrifugal compressors (potentially, over 130 flow parts are going to be installed to replace the currently utilized flow parts) at Gazprom Transgaz Yugorsk facilities. The project's benefits are a reduced load of GCUs, as well as lower consumption of fuel and power during gas transmission. For instance, fuel gas savings per GCU make up around 1.5 million cubic meters each year.

It should be noted that not each and every innovation is meant to produce a great economic benefit, as priority is often given to process safety, human health, and environmental conservation. Nevertheless, the actual economic benefit for the gas industry from implementing our own R&D solutions in the Group's organizations, without taking third-party developments into account, exceeds RUB 10 billion per year.