No. 2, 2006

Andrey Korzhubayev,
Cand. Sc., Senior Researcher of the Institute of Oil and Gas Geology of the RAS Siberian Branch


Realization of new priority oil and gas projects in the first quarter of the 21st century is a condition for successful implementation of the Energy Strategy

Siberia and the Far East have a unique potential of strategic mineral resources. Today, mineral exports from these regions account (in terms of value) for more than 70% of Russia's total export. Also, these regions account for about 11% of the world's production of oil and 23% of natural gas. The development of this raw materials potential and, on its basis, of high-tech industries will, in the future, be one of the primary factors promoting socioeconomic progress inside Russia and strengthening its economic and geopolitical positions in the world.

New horizons

Russia's oil and gas reserves are located mainly in its northern and eastern offshore areas. Their effective development calls for implementation of several major capital-intensive projects.

In the oil and gas complex of Northwestern Siberia such projects are: developing the gas reserves of the Yamal Peninsula and building up the capacity of the Yamal-Center gas-main pipeline system.

Furthermore, it is planned to step up natural gas and gas condensate production in the Gulf of Ob region and the Nadym-Pur-Taz interfluvial area. In the northwest of the Krasnoyarsk Territory, which geographically belongs to Western Siberia, a new oil and gas complex (called Nizhneyeniseysky or Lodochno-Vankorsky) is to be constructed. The complex will be integrated into the Western-Siberian oil and gas transportation system. The development of oil and gas production in the north of European Russia will be achieved mainly with the help of new projects - such as the Barents Sea and Pechora oil and gas complexes. These projects will be based on the Shtokmanovskoye and Prirazlomnoye offshore fields, the Val Gamburtseva group of onshore fields, and some others.

To be built in Eastern Siberia and the Republic of Sakha (Yakutia) in the next 15-20 years are a new oil and gas complex and a pipeline transportation system running through Eastern Siberia and the Far East to the Russian ports of Nakhodka and Perevoznaya Bay on the Pacific coast, and on to the countries of the Asia-Pacific Region. Another important task is constructing new large hydrocarbon-producing centers in the Lena-Tunguska oil- and gas-bearing province.

Hence the need for vigorous investment policy on the part of the Government in such sectors as prospecting, transportation and processing that today structurally hold back the progress of the oil and gas complex. Moreover, large-scale polymer production projects will be implemented in some regions of Western and Eastern Siberia.

In Eastern Siberia, it is necessary to set up large centers for helium production and liquefaction and to organize a system for its large-capacity transportation. Given the complex nature of fields in the Siberian platform, the development of such sectors as oil and gas production and refining, oil and gas chemistry and helium production should be carried out within the framework of a single national program.

It is planned to build a new gas-processing works in the Irkutsk Region near the city of Sayansk, which, jointly with the local helium-liquefaction facility, will form the backbone of a new Eastern Siberian gas-chemical complex. Hence the need for an early development of the Atovskoye gas field (located 10 km off the Kovykta-Sayansk gas pipeline). In Krasnoyarsk Territory, gas-processing and helium-liquefying facilities should rather be built near the town of Boguchany to achieve optimum efficiency.

Future trunk lines

In forming the infrastructure for transporting oil and gas, it is important to take into account the current and prospective effectiveness of projects. It is necessary to provide for the possibility of an alternative or combined use of motor vehicle and railroad carriage routes, oil and gas pipelines, river and sea transportation, and the use of power lines. In all cases, it is necessary to provide for the rational sitting

of refineries gas processing plants, natural gas and helium liquefaction

facilities, underground gas storage tanks, oil and LNG loading terminals, tank farms, power plants, etc. Very promising seem projects envisaging the building of ultra long-range trunk pipeline systems running from Western and Eastern Siberia to China, and energy bridges from Eastern Siberia to the Far East and the countries of East Asia, as well as projects envisaging the forming of an infrastructure for preparing shipments of liquefied natural gas and gas condensate on the coast of the Pechora Sea, in the lower reaches of the Yenisey and on the Yamal Peninsula, and dispatching these shipments along the Northern Sea Route to Russia's regions bordering on the Arctic Ocean as well as exporting them to Europe, North America and countries of the Asia-Pacific Region.

About to start is the construction of an oil pipeline from Eastern Siberia to the Pacific coast (Tayshet-Skovorodino-Perevoznaya Bay) with a possible branch (in the vicinity of Skovorodino) running to China. There will also be a supply pipeline system. The top-priority project is the construction of a pipeline between the Upper Chona and Ust-Kut, with a railroad terminal near the settlement of Magistralny. In the north, on the territory of the Republic of Sakha (Yakutia), the Talakan and Srednebotuobin oil fields are to be connected up to the pipeline. The construction of another pipeline is to be started at the same time along the Yurubcheno-Tokhomskaya Zone-Poyma or the Yurubcheno-Tokhomskaya Zone-Tayshet route. This will make it possible to work the Yurubcheno-Tokhom and Kuyumbin oil fields.

In the gas industry of Eastern Siberia and the Republic of Sakha (Yakutia) the top-priority project is the construction of the Kovykta-Sayansk-Irkutsk gas pipeline running on to Ulan-Ude and Chita. This pipeline will help bring gas to the south of Eastern Siberia and Transbaykalia as well as improve the ecological situation in the area of Lake Baykal. Later on this trunk line may be linked with Gazprom's Unified Gas Supply System and, following the signing of appropriate guarantee and price agreements, this pipeline may be extended to reach the countries of the Asia-Pacific Region.

According to estimates made, in order to ensure the reliable functioning of the country's oil and gas complex up to the year 2020, to develop the traditional centers of hydrocarbon production and build new ones, it is necessary to discover and explore offshore and onshore fields in Russia, with reserves of more than 11.5 billion tons of oil and over 19 trillion m3 of gas, respectively. The total allocations for prospecting works are expected to exceed $55 billion. First and foremost, such prospecting should be carried out in northern and eastern Russia, particularly in Western and Eastern Siberia, the Republic of Sakha (Yakutia), and the shelf areas of the Barents, Kara, Pechora, East Siberian, Bering and Chukchi seas, as well as the Sea of Okhotsk and the Laptev Sea.

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Oil of Russia, No. 2, 2006
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