No. 2, 2010
Sergey Yurov
,
Head of the Analytical Department of IC Barrel
YAMAL TODAY AND TOMORROW
The hydrocarbon resources of the Yamal-Nenets Autonomous Area constitute the basis for the further development of Russia’s oil and gas complex
The Yamal-Nenets Autonomous Area, situated in the Arctic zone in the north of the West Siberian plain, is today Russia's biggest reserve of hydrocarbons. Over more than 30 years of active development, about 14 trillion m3 of natural gas have been produced here, but there are still tremendous reserves remaining within its depths: about 95 trillion m3 of gas (of which 35 trillion are of industrial categories) and 19 billion tons of oil and of gas condensate. The Yamal Peninsula alone might, in the long term, provide an annual gas production of 360 billion m3.
Among the industry leaders
About 220 fields of hydrocarbon raw materials have been discovered on the territory of the Area, 18 of these being quite unique. Overall, in fact, in consideration of the Kara Sea area, the Area's reserves are estimated at over 125 trillion m3. At the same time, discovery of new and even bigger gas reservoirs is highly likely, the most promising being forecast for Yamal.
The biggest subsidiary of the gas monopolist in the Area is Gazprom dobycha Yamburg Ltd., which celebrated its 25th anniversary in November 2009. Overall, this enterprise is the leading gas producer in Russia, accounting for over 40% of Gazprom's total output of natural gas. Since its inception, the company has produced more than 4 trillion m3 of gas and 22 million tons of gas condensate. Today, the company holds licenses to develop the Yamburgskoye, Tazovskoye, Southern Parusovoye, Northern Parusovoye and Zapolyarnoye fields. An event of significance was the start-up of the last of these in 2001. Since 2004, it has been providing an annual 100 billion m3 of gas, allowing Russia to retain its status as a leading gas power.
The gas condensate of the Yamal-Nenets Autonomous Area is produced by 18 enterprises at 24 fields. The leading positions here are also held by Gazprom - over the first nine months of last year, its subsidiaries produced 4.59 million tons of condensate (65% of the production in the Area). Next come NOVATEK - 1.69 million tons (23.9%), Rospan International - 0.4 million tons (5.7%), and Rosneft - 0.25 million tons (3.6%). The others account for 127,700 tons (1,8%).
In 2009, oil was produced in the Yamal-Nenets Autonomous Area by 14 enterprises on 55 fields. The main players here are the subsidiaries of Gazprom neft and Rosneft, though small and medium-sized production companies are also active in the Area.
Last year, 32 companies were engaged in geological exploration work on 80 license sectors in the Yamal-Nenets Autonomous Area while 26 companies were doing exploration, evaluation and prospecting work on 43 sectors. Overall, three new fields (the Northern Yubileynoye, Western Yubileynoye and Northern Yamsoveyskoye) and 14 formations on old fields were discovered.
New projects
The following downstream sector enterprises are located on the territory of the Yamal-Nenets Autonomous Area: Gazprom pererabotka Urengoy, Tarasovsky Refinery RN-Purneftegaz, Purnefteprodukt Refinery, Gubkinsky and Noyabrsky Gas Refinery Complexes (both belonging to SiburTyumenGaz), the Methanol production plant at NOVATEK-Yurkharovneftegaz and NOVATEK-Purovsky Gas Condensate Refinery.
The development strategy for refining in the Yamal-Nenets Autonomous Area envisages both meeting own needs for petroleum products and entry onto the markets of other northern regions of Russia. For this purpose, it is intended to increase the volume of hydrocarbon refining several times over by creating new capacities at the Urengoy and Gubinsky Gas Processing Plants, renovate and expand existing gas refining complexes and create small-scale facilities on the fields.
In particular, SiburTyumenGaz is planning, by 2011, to modernize the Gubkinsky and Noyabrsky Gas Refinery Complexes. At the first of these, the intention is to install and connect a gas regeneration blower, which will allow a 1.26-fold increase in the amount of associated gas accepted. At the second, construction is under way of a low-temperature separation unit at the Vyngapurovskaya compressor plant site. In addition, the company's plan for construction of the Vyngapurovskaya gas refining complex with expansion of the Vyngayankhinskaya compressor plants, making it possible to accept gas for refining from Gazprom neft and Rosneft from the Vyngapurovskoye, Novogodneye, Yarainerskoye and Meretoyakhinskoye fields. Also envisaged are construction of a loading rack for broad fraction of light hydrocarbons (BFLH) near the town of Noyabrsk, with a through capacity of up to 1.5 million tons a year, and laying of an BFLH product pipeline.
In turn, Purnefteprodukt plans to build the second stage of a refinery with a capacity of 100,000 tons by 2012 (the first, with a capacity of 75 thousand tons, was commissioned at the end of 2007). The increase in refining capacity would make it possible to produce in the order of 3 million tons of high quality motor fuels a year by 2011. And, subsequently, this indicator would be brought up to 4 million tons, sufficing for the internal requirements of the Yamal-Nenets Autonomous Area (in 2010 they will amount to 1.5 million tons) and for deliveries of diesel fuel to the sea fleet serving the Northern Sea Route.
As far as sales are concerned, they are represented in the Area by such companies as Purnefteprodukt (owning 17 gasoline filling stations), Gazprom neft-Noyabrsk (9), Rosneft-Yamalnefteprodukt (6) and LUKOIL-Severo-Zapadnefteprodukt (2).
The Yamal-Nenets Autonomous Area may be called the "cradle" of this country's biggest gas pipelines, this being where one of the longest pipeline in the world originates, running from the northern areas of the Tyumen Region through the Central Part of Russia to Europe. The aggregate distance covered by all the major networks in the Area is about 11,000 km and their through capacity - 113 million tons a year.
In connection with development of the Yamal Peninsula, Gazprom has initiated construction of the Bovanenkovskoye - Ukhta - Torzhok gas pipeline, running 1,074 km to Ukhta, 288 km of these crossing the territory of the Yamal-Nenets Autonomous Area (including 72 km along the bottom of the Baydaratskaya Bay). The design capacity of this pipeline is 140 billion m3.
In August last year, a new oil pipeline was started up connecting the Vankorskaya group of fields and the Purpe transfer pumping station on the Yamal Peninsula (built by Rosneft). Of its total length of 543 km, 350 km cross the territory of the Yamal Peninsula.
In addition, TNK-ÂÐ plans to create a Yamal oil pipeline system for transporting crude from difficult-to-recover fields in North West Siberia (from the Russkoye, Suzunskoye and Tagulskoye fields on the territory of Krasnoyarsk Territory and the Yamal-Nenets Autonomous Area) to Transneft's existing main oil pipeline system. The route will cover 636.5 km (including 469.5 km across the Yamal-Nenets Autonomous Area) and the pipeline capacity will be up to 20 million tons.
On the threshold of forthcoming events
As of October 1, 2009, revenues into the budget of the Yamal-Nenets Autonomous Area amounted to 49.05 billion rubles. The main sources were: corporate profit tax (31.2% of revenues), personal income tax (19.8%), and corporate property tax. Expenditures were based on actual financial resources available.
The regional budget is clearly anti-crisis orientated since, apart from social measures, it provides for regional and municipal contracts to be placed with the civilian construction complex. A substantial contribution to the social development of towns and villages is made by the subsidiaries of Gazprom, Rosneft, NOVATEK and other companies.
At the same time, deficit-free budget has been adopted for 2010, characterized by a high level of liquidity and absence of any debt burden. That said, it is important to note that the overwhelming majority of the budgets of the constituent entities of the Russian Federation for the current year envisage expenditures in excess of revenues. In particular, of the 13 donor regions, in 2010 only the Samara Region and the Yamal-Nenets Autonomous Area will have deficit-free regional budgets.
The Area's consolidated budget is, above all, geared to provide for the financial needs of municipalities. Inter-budget transfers at the local level alone will amount to about 36 billion rubles, which is almost 18% more than in 2009.
In addition, this year will see a more than 1.5-fold increase in budget investments into social facilities (according to the target investment program). Social policy, healthcare, education, sports, environmental protection and agricultural-industrial complex expenditures will also go up.
The legislative "headway" made last year included, above all, the success achieved by the joint work of the Area administration with the government and the State Duma of the Russian Federation. This was manifested in the passing of a federal law under which property tax within the unified gas supply system will be paid into the budgets of the regions where these facilities are located. With respect to the Yamal-Nenets Autonomous Area, this means annual replenishment of the treasury with about 2 billion rubles. Another advantage for the Area is the fact that this type of tax is the most stable and, as the gas transportation system develops, it can only grow.
In 2009, events occurred that were of fundamental significance for the near future of the Yamal Peninsula. In March, for instance, the "Fundamentals of the State Policy of the Russian Federation in the Arctic for the Period up to 2020 and the Longer Term", approved by the president of the Russian Federation, were promulgated. This document determines the Yamal-Nenets Autonomous Area as one of the key conductors of the government's policy in the Arctic. Essentially, this heralds the start of the second stage in the industrial development of the Area.
Also under implementation is the target program "Development of the mineral resource base of the Yamal-Nenets Autonomous Area for 2009-2011", which is aimed at increasing the volume of discovered reserves and forecast mineral resources.
Finally, last September, a notable conference was held in Salekhard under the chairmanship of Russian Prime Minister Vladimir Putin. At this conference, federal ministries, Gazprom and other commercial entities, as well as the administrations of the Yamal-Nenets Autonomous Area and the Krasnoyarsk Territory were instructed to draw, during the first quarter of 2010, a draft program for comprehensive development of hydrocarbon raw material fields on these territories. Subsequently, individual provisions concerning development of the Yamal oil and gas fields will be integrated into it and new directions for supplying natural gas will be indicated.
It is also assumed that restoration of the pre-crisis gas production volumes will be achieved through dynamic development of independent producers, as well as start-up of the Bovanenkovskoye field in the third quarter of 2012.
