On 22 September, the city of Irkutsk hosted a meeting of the Gazprom/BASF AG Coordinating Committee. The Committee reviewed the progress in cooperation between the 2 companies in the development of section 1A of the Achimov deposits at the Urengoiskoye field (Achimov Project).

The meeting underscored that the Achimov Project was economically attractive for both companies and was being looked upon as an initial stage of cooperation deepening in the joint development of hydrocarbon fields.

The parties pointed out that the Achimgaz joint venture was actively engaged in finalizing scrupulous engineering works and preparations with the view of launching the section 1A trial operation - the Project 2nd phase.

To promote the accords achieved earlier, Gazprom, Urengoigazprom and Wintershall AG developed based on a heads of agreement a Draft fundamental agreement identifying general principles of cooperation, Project structure, financing scheme, hydrocarbon feedstock marketing regulations and other terms and conditions of business relationship between the parties. At present, said Project is being coordinated in a preset order.

Gazprom and BASF are making arrangements to adopt an investment decision to launch the pilot operation of the Project.

Under Achimgaz’s request, the TyumenNIIgiprogaz Research Institute conducted all the required field prospecting, prepared the land selection paperwork and studied the environmental background status. The Project works are being carried out in accordance with a ratified calendar plan. The Instute plans to submit the final version of the Project to the customer in October this year.

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The Achimgaz 50/50 joint venture was founded in July 2003 by Urengoigazprom and Wintershall AG. The company is being involved in the exploration of the 1st pilot play of the Achimov deposits at the Urengoiskoye gas condensate field. Some 200 bcm of gas and 40 mln t of condensate are planned to be produced over the entire development period (43 years), with roughly 8.3 bcm of gas and 2.8 mln t of condensate to be annually extracted during continuous production.

The parties started consultations on potential setting up of a joint venture in 1998. Wintershall counts on state-of-the-art technologies, equipment and vast experience of drilling super-depth sub-horizontal wells in the complex geologic environment, which is crucial for the development of the Urengoi Achimov deposits.

The Achimov formations lie as deep as 3,150-3,800 m and have a great deal more complex geologic structure than the Cenomanian and Valanginian deposits being currently under development.

Given the geologic prospecting results, the Achimov formations productivity has been confirmed over a quite extensive territory of the Nadym-Pur-Taz region, with the bulk of recoverable hydrocarbon reserves concentrated at the Urengoiskoye oil and gas condensate field. Urengoigazprom, a Gazprom 100% subsidiary, is the Urengoiskoye field development licensee.

The Achimov formations of the Urengoiskoye field are divided into 6 pilot plays to be developed on a stage-by-stage basis.

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