Ukhta (Republic of Komi) hosted the celebrations dedicated to the launch of the construction and the welding of the first joint of the Bovanenkovo – Ukhta gas trunkline system.

Participating in the event were Viktor Zubkov, First Deputy Prime Minister of the Russian Federation, Chairman of the Gazprom Board of Directors, Alexey Miller, Chairman of the Gazprom Management Committee, Vladimir Torlopov, Head of the Republic of Komi and Yury Neelov, Governor of the Yamal-Nenets Autonomous Okrug.

The Bovanenkovo – Ukhta gas trunkline system is intended for gas transportation from the Bovanenkovskoye field, the largest on the Yamal Peninsula, to the Unified Gas Supply System of Russia.

The drilling of the first production well has also been initiated in the Bovanenkovskoye field.

“We are witnessing the event, which will figure in the history of both the national gas industry and the entire country. The welding of the first joint at the Bovanenkovo – Ukhta gas trunkline system and the drilling of the first production well in the Bovanenkovskoye field have inaugurated the practical implementation of the megaproject for developing the abundant hydrocarbon reserves of the Yamal Peninsula. It is the largest energy project in the contemporary history of Russia, unparalleled in terms of sophistication.

The meaning of Yamal’s lucrative reserves to our country is hard to overestimate. Russia’s socio-economic development and the growing welfare of its citizens are infeasible without the relevant energy support. Implementing the deadlines and parameters set forth in the Energy Strategy until 2030 and aimed at increasing natural gas production is directly linked to the development of this oil and gas production region. Moreover, the Yamal megaproject will give a powerful impetus to the national science development and the Russian industry upgrade,” stated Viktor Zubkov.

“Today we are initiating the practical implementation of the Yamal megaproject – the project, which, in terms of scope and significance, is equal to the development of the Western Siberia’s fields in the 1970s.

The Yamal Peninsula is a most significant gas-bearing province of our country. By 2030 we are planning to produce up to 360 bcmpa of gas from the Yamal, which is commensurate with Gazprom’s current gas supplies to the domestic consumers and twofold up on the volume of gas exports. In order to secure transportation of the Yamal gas until 2030, a unique new-generation gas transportation system will be created and subsequently become the key element of the Unified Gas Supply System of Russia.

As some countries are still on their way to start developing the Arctic fields, we already possess a wealth of experience, which can also be successfully applied by the Company later on during the implementation of foreign projects,” noted Alexey Miller.

Background:

In January 2002 the Gazprom Management Committee identified the Yamal Peninsula as a region of the Company’s strategic interest. The commercial development of Yamal’s fields will increase local gas production to 310-360 bcmpa by 2030. Accessing Yamal is of utter importance for the purpose of ensuring gas production growth.

11 gas and 15 oil, gas and condensate fields with approximately 16 tcm of explored and provisionally evaluated gas reserves (ABC1+C2) and nearly 22 tcm of in-place and forecast gas reserves (C3+D3) have been discovered on the Yamal Peninsula and its adjacent offshore areas. Condensate reserves (ABC1) are estimated at 230.7 mln t and oil reserves – at 291.8 mln t. In terms of gas reserves (ABC1+C2) the Bovanenkovskoye field is the most significant one on the Yamal Peninsula (4.9 tcm).

The licenses for the right to use the subsurface resources of the Bovanenkovskoye, Kharasaveyskoye, Novoportovskoye, Kruzenshternskoye, Severo-Tambeyskoye, Zapadno-Tambeyskoye, Tasiyskoye and Malyginskoye fields are held by Gazprom Group.

The Cenomanian-Aptian deposits of the Bovanenkovskoye field are a paramount development target on the Yamal. It is anticipated to increase the projected gas production at the Bovanenkovskoye field from current 115 bcmpa to 140 bcmpa in the long-term.

In order to deliver the extracted gas to the UGSS, it is necessary to build before 2030 a 2,500-km-long gas transportation system including the new 1,100-km-long Bovanenkovo – Ukhta gas transportation corridor – gas trunkline system.

In October 2006 the Gazprom Management Committee reviewed the results of the Investment Rationale for the pre-development of the Bovanenkovskoye field on the Yamal Peninsula, and for gas transportation. The Committee ordered to initiate the investment stage of the Bovanenkovskoye field development and gas main network construction.

Gazprom’s relevant business units were entrusted with ensuring the commissioning in the third quarter of 2011 of the first startup complexes (rated at least at 15 bcmpa of gas) intended for the pre-development of the Cenomanian-Aptian deposits of the Bovanenkovskoye field, as well as of the Bovanenkovo – Ukhta gas trunkline system. The first startup complex involves construction of 98 wells (60 wells are to be brought onstream in the third quarter of 2011) and the first module of a comprehensive gas treatment unit.

In July 2008 Gazprom launched the construction of the gas pipeline’s most difficult section – the submerged crossing via the Baidarata Bay. A total of 37.7 km of pipelines were laid in the section this year.

By 2011 the Baidarata Bay is planned to see the construction of the first two lines (72-km-long each) of the submerged crossing.