No. 4, 2011

Alexander Matveichuk ,
Ph.d. (History), Member of the Russian Academy of Natural Sciences


The first company for the production of natural gas in Russia, the Stavropol Partnership for the Study and Exploitation of Subsoil Resources, was founded in 1911

In Russia, natural gas's path from the frightened peasant's "swamp fire" to valuable "blue fuel" that would radically alter the population's socioeconomic conditions was a short one. The creation and operations of Russia's first public company for the production and use of natural gas, the Stavropol Partnership for the Study and Exploitation of Subsoil Resources, was a unique pilot project of the early 1910s. 

On the path of pioneers

Strictly speaking, the first attempts to use natural gas in the Russian Empire were made in the 19th century. At the beginning, mining engineer Nikolay Voskoboynikov used an "eternal flame" as fuel for crude stills at an experimental plant on the Apsheron Peninsula for nine months, from November 1837 through August 1838. From 1859 on, natural gas found similar application over a more prolonged period at the Trans-Caspian Trading Company's crude distilling plant in Surakhany, not far from Baku.

Russia's first efforts in exploratory drilling for gas were made at the beginning of the 20th century. The Baku Oil Company obtained in 1901 a small gas flow at shallow depths in Surakhany, on the Apsheron Peninsula, after which work began on two wells in other places. On February 27 (14), 1902, Russia's first gas gusher was brought in from a depth of around 160 meters, with a production of 2 million ft3 per day. Other Russian companies soon followed the example of the Baku Oil Company by drilling for gas wells. By 1905, there were already six industrial gas pipelines on the Apsheron Peninsula, after which the Russian government decided to bring the gas business under coverage of the law.

On December 23, 1907, Emperor Nikolas II granted his "highest approval" to the first piece of legislation in Russian history on the production of natural gas, the Council of Ministers' regulation On Granting Permission to Oil Companies that have Already Received, on the Basis of the Temporary Rules of May 14, 1900, Sectors for Oil Prospecting and Production within the Confines of the Apsheron Peninsula also to Produce Hydrocarbon Gas in the Same Sectors.

In the European part of Russia, natural gas was first used for industrial purposes as early as the beginning of the 20th century. In 1906, entrepreneur Nikolay Melnikov was producing natural gas from a well around 44 meters deep and using it as fuel for steam boilers at brick and glass factories located not far from the town of Dergachi in Saratov Province, and for heating residential and industrial structures as well. This experiment was, however, limited to a small area and was not repeated elsewhere.


The gas initiative at Anton Grubi's brewery

At the beginning of the 1910s, the honor of becoming pioneers in the production and use of natural gas fell to the enterprising entrepreneurs and engineers of Stavropol. At that time, Stavropol was an ordinary provincial Russian town with a population of around 40,000, a substantial number of whom were engaged in the cultivation of gardens and orchards. The city administration raised the issue of lighting Stavropol's streets a number of times. "One cannot help but agree that the lighting of Stavropol's streets is one of the most important matters in improving our city," ran one of its decisions. Among the projects for lighting the city's streets was "the building of a gas plant that would use bituminous coal or oil residues," which was rejected due to a shortage of funds in the town budget. Literally several days after this, an event occurred that would mark the beginning of an unforgettable period in the history of Stavropol, one known colorfully as The Gas Rush.

The discovery of a gas field within Stavropol's city limits was due entirely to a stroke of luck. In October 1909, Anton Grubi, the owner of a brewery, was having an artesian well dug on its territory by two skilled professional drillers, the Vaver brothers. On February 15, 1911, as they reached a depth of around 190 meters, an intense rush of natural gas issued from the well and was set aflame by a careless lighting of a match. The burning torch of gas, around three meters high, alarmed the owner of the brewery, and the local fire brigade was called immediately to put it out. With some difficulty, they succeeded in extinguishing the flaming well.

Soon afterwards, in the laboratory of the Provincial Commission on Land Use, chemist N.P. Romodanovsky performed the first physical and chemical analysis of the released natural gas, demonstrating its suitability for industrial use. Since Grubi, the owner of the brewery, was an exceptionally enterprising fellow, he knew how to correctly assess and make use of this stroke of luck. Following the design of engineer A.V. Karpov, an underground pipeline was quickly laid from the well to the brewery's boiler house, where welders put together an extremely simple apparatus for burning the gas, composed of an ordinary pipe with a flattened end and a valve. After some time, such primitive burners were replaced with units of an original design, invented by engineer Alois Erhart, which ensured the efficient and safe combustion of natural gas. In the spring of that year, Grubi dug a second well on the territory of his brewery; on July 26, 1911, it too began venting considerable quantities of gas from a depth of around 180 meters. Both wells were subsequently connected to a common pipeline with a gas pump that forced the gas into a "gas collector," from which it was distributed to the boiler house burners.

The successful gas initiative at Grubi's brewery provided a strong impetus to stimulating Stavropol's entrepreneurial community. V.A. Alafuzov, the owner of a second brewery, set to drilling gas wells directly on its territory alongside the grounds of Stavropol's outdoor trade fair. His example was soon followed by entrepreneurs A.B. Guliev, K.Kh. Zarifyants, and the Dyomin Bros. Company. The Mesnyankin brothers then decided to drill a well to provide gas for heating their shopping arcade and its theater. Even the provincial excise bureau decided to drill a well in the courtyard of the state wine warehouse and switch over to gas for heating its steam boilers.

Creation of the first gas production company

The scattered efforts of individual entrepreneurs could not, however, entirely solve the problem of the city's gas supply. An article written by Stavropol City Council member Aleksey Degtyarevskii on the need to pool the town residents' efforts "for the joint drilling of a deep well" appeared in the newspaper North Caucasus Territory on June 26, 1911. This proposal was supported by the public, and an appeal from the members of an initiative committee headed by Mayor Mikhail Poyarkov to residents of Stavropol to become founders of a company for the production and use of gas to meet the city's needs appeared in the same newspaper on July 19, 1911.

The founding session of the Stavropol Company for the Study and Exploitation of Subsoil Resources was held at the City Hall on August 7, 1911. There were 11 founding members: Mayor Poyarkov; City Council member Degtyarevsky; engineer Erhart; businessmen Grubi, K. Novotni, A. Tarasov, A. Kukhtin, and I. Mesnyankin; notary V. Manzhos-Bely; and provincial officials V. Miloserdov and A. Ozerov. The reserve capital of the "company built on faith" was set at 80,000 rubles, divided into 320 shares of 250 rubles each. The founders contributed 19,500 rubles. Two hundred and forty-two shares were issued to cover the remaining sum of 60,500 rubles and were quickly bought up.

September 6, 1911, marked the official start of operations of the Stavropol Company for the Study and Exploitation of Subsoil Resources. It was even announced that 600 50-candlepower incandescent lamps with Auerov hoods would be used for street lighting. In November 1911, the company's directors invited Baku geologist Grigory Petunnikov, who studied test holes on the shores of Lake Sengeleevskoye under the assumption that "... it was there where we should find the stratum of sand from which the gas in Stavropol issues," to explore for gas. An article by mining engineer K.A. Prokopov, "Stavropol Gas and the Possibility of Obtaining Gas in the City of Stavropol," in which the entrepreneurial efforts of the town's residents were highly appraised and confidence was expressed in the quick completion of the gas project, appeared in the newspaper North Caucasus Territory in late 1911.

In March 1912, board members Erhart, Miloserdov, and Kukhtin of the Stavropol Company for the Study and Exploitation of Subsoil Resources were sent to Baku and Grozny "to acquaint themselves with drilling and to find a contractor." After their trip, a request was submitted to the City Council for the leasing of five plots of ground "for a period of four years at 100 rubles per 1.46 hectares annually." Over the period of the lease, the Company pledged to conduct surveys and drill test wells; should "oil be discovered in quantities allowing its exploitation, the city would extend the period of the lease to 36 years and offer the Company an additional 20 plots of 1.46 hectares around the already producing wells at the same leasing fee and under the same leasing conditions."

The thorny path to the blue flame

In April 1912, the Stavropol Company for the Study and Exploitation of Subsoil Resources drilled its first well "in the ravine at Lyagushevka." In May, a 45-horsepower steam engine and boiler were delivered to the site. Construction began of a drilling rig, boiler house, blacksmith's shop, offices, and barracks for the workers. A field hospital of sorts was also set up at the drilling site.

All the works were completed at the beginning of the last month of summer, and on August 12, 1912, after the rig was blessed by a priest, the drilling of the well began in the presence of representatives from the local authorities, headed by Governor B.M. Yanushevich, and the founders and shareholders of the Company. Work on the first stage went smoothly, and the bore hole reached a depth of more than 170 meters on September 26. Signs of gas in the well had already become evident at a depth of 148 meters, but the most powerful discharge occurred at a depth of around 224 meters. Drilling was temporarily suspended on January 7, 1913. The gas that had already been produced was collected in a large glass container and shipped to the Don Polytechnical Institute in Novocherkassk, for subsequent study in the laboratory of Professor Lyashenko.

Signs of bituminesence appeared at a depth of around 277 meters and continued to grow. Mining engineer Yevgeny Yushkin, a consultant to the Company, recommended that it was necessary to continue "deepening the well in order to bypass the entire complex of tertiary strata, different horizons of which appear to be oil-bearing in different regions." The drilling of the well continued and the drillers reached their planned depth of around 640 meters by the end of 1913. The reports they presented, however, were disappointing to the members of the Company Board: neither oil nor gas were to be found in the well at that depth. In the end, this turned out to be fatal to the Company's continued existence, since considerable sums were needed to drill a second and a third well in different sectors. At a shareholder's meeting, however, the founders of the Company were unable to convince the former of the need to allocate additional funds. Searches got under way to find additional sources of financing for the project, but World War I, which began in August 1914, along with the revolutionary events of 1917, put an end to further operations of the Stavropol Company for the Study and Exploitation of Subsoil Resources.

In 1915, engineer Alois Erhart published his book Natural Flammable Gas and Its Use in the City of Stavropol, in which he described all the twists and turns of The Gas Rush. In conclusion, he wrote sadly: "It is strange indeed to read in the local papers about the skyrocketing cost of firewood and fuel when under our feet is a huge reserve of free fuel, not just for heating and lighting but for putting hundreds of machines into motion as well, both in existing factories and to meet the needs of numerous new factories."

The prophetic vision of one of the pioneers of Stavropol's gas business came true only after nearly five decades had gone by. In 1950, Soviet geologists in Stavropol Territory discovered natural gas that was unique in the amount of its reserves (174 billion m3), the North Stavropol gas field. On December 22, 1956, the first line of the 1,255 kilometer long Stavropol-Moscow gas pipeline was put into operation, with Stavropol gas being delivered to the capital of the Soviet Union.

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Oil of Russia, No. 4, 2011
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