The construction commencement date for the ‘Power of Siberia’ gas pipeline that will run across Eastern Siberia into China has been announced. As confirmed by several sources in the industry, the commencement ceremony is scheduled to be held in the city of Yakutsk on September 1, 2014.
Gasprom previously planned to start the pipeline construction in the summer of 2014. In fact, in the middle of June the President of the company Alexey Miller stated that the first pipeline joint would be welded “as early as August”. Direct supplies of gas to China should start in 2019.
The ‘Power of Siberia’ gas transmission system is intended for gas delivery from the Irkutsk Region and Yakutia gas production centres to Vladivostok in the Russian Far East and China. The approximately 4,000 km 56-inch gas pipeline with an annual throughout of 64 Bcm/a will be constructed along the existing ESPO oil pipeline. The branch to China will run via the border city of Blagoveschensk. The 30-year contract to supply 38 Bcm/a of gas to China was signed between Gazprom and CNPC on May 21 2014 after 10 years of negotiations.
Image: the ‘Power of Siberia’ gas pipeline marked by red dash line (gazprom.ru).
As reported in Rosneft’ press release published on the corporate web site on 20 August 2013, a new oil and gas play was discovered on Mogdinsky license block located in the northern part of Irkutsk Oblast 160km north of ESPO.
According to the release the exploration well Mogdinsky-10 produced free-flowing gas condensate at the rate of 425 K m3/day and oil – 90m3/day in the course of testing Lower Ustkut horizon.
The well location was selected based on the fundamentally new geological model created by Rosneft’s subsidiary RN Exploration LLC, which enabled Rosneft to tap a hydrocarbon deposit that was not encountered before.
The play’s reserves are estimated at over 4 mln. tonnes of oil and 2 bln. m3 of condensate.
Another discovery from the same horizon was made on Danilovo block where well No. 73 produced free-flowing oil at 165m3/day during the well test, which proves soundness of the new 3D seismic data-based geological model.
Original article at http://www.rosneft.ru/news/news_in_press/20082013.html
Eastern Siberia is Russia’s most promising exploration and production region with some analysts estimates of ‘undiscovered’ reserves of 80 billion boe. Eastern Siberian oil and gas provinces cover about 3.3 million square kilometres. They extend from the Arctic offshore in the north to Lake Baikal and the mountains of southern Russia.
The region is home to some of the Russia’s largest green field projects and is the main beneficiary of the recently introduced tax incentives, resulting in a benign fiscal regime and a substantially higher average operating cash-flows per barrel of oil sold.
Historically the region had limited exploration and development due to its size and remote location, harsh climate, and lack of infrastructure. However, with the decline of production at mature fields in West Siberia, Russian government has has turned its attention to a number of new regions (Eastern Siberia, Timan-Pechora and Northern Caspian), of which Eastern Siberia is the most noticeable one given its proximity to customers in the Asia-Pacific region. Over the recent years the region has seen significant infrastructure development and booming licensing activity as a result of the construction of the Eastern Siberia – Pacific Ocean pipeline, which has created a direct link between Eastern Siberia and the fast-growing Asian markets. With major new infrastructure in place, Eastern Siberian production is forecast to grow rapidly in the next few years, peaking at over 1.3 million b/d around 2017.
The Russian Government has put a lot of trust in the Eastern Siberia by constructing ESPO pipeline and providing to oil producers preferential taxation regime (in the reference to production tax and export duties). Therefore, the region is expected to be the main source of Russia’s production growth over the next 10 years.
(Original article http://irkutskoil.com/section_29/section_64)