Natural gas, not oil or coal, will pull Russia out of its fuel production slump by the end of the century, predicts a recently disclosed study by Moscow's leading energy specialists.
Western investment in Russia's natural gas industry is now being proposed on a scale rivaling foreign outlays for joint ventures aimed at stabilizing the republic's oil production.
Moscow planners envision outlays of about $15 billion to develop gas from western Siberia's huge Yamal Peninsula, which lies entirely north of the Arctic Circle. Yamal gas would be delivered west from the base of the peninsula to European Russia, to former Soviet eastern European satellite nations, and to customers in western Europe.
Four trunk pipelines, probably of 56 in. diameter, will have to be built from Yamal by the early years of the next century to meet growing energy demands in Russia and other members of the Commonwealth of Independent States. Moscow officials also believe demand for Russian gas will grow steadily in western Europe "as supplies from Netherlands and the North Sea shelf decline."
The C.I.S. business weekly Ekonomika i Zhizn (Economics and Life), in describing the "Yamalgazenergo" (Yamal gas energy) project, declared emphatically it cannot be implemented without massive assistance from the West. It said Russia lacks not only the money to finance Yamalgazenergo but also needs advanced technology not presently available from domestic sources.
"Large western companies must be induced to invest not only in developing the Yamal Peninsula's gas fields but in providing large diameter pipe, equipment for laying the new lines, and in construction of new gas fired power generating plants in Russia and other C.I.S. republics," Ekonomika i Zhizn declared.
In addition, western money and technology will be needed to ensure that the Yamalgazenergo project will meet the especially strict environmental requirements of the Yamal Peninsula's fragile tundra.
"Already," the newspaper reported, "extensive negotiations are under way with a number of foreign firms to develop advanced technology in our country for electrical power generation based on more efficient combustion of coal and greater use of gas. The significance of Yamalgazenergo extends far beyond the northern areas of the Russian Federation and encompasses practically the entire republic.
"It's planned that additional gasification will be carried out in other C.I.S. nations that participate in the Yamalgazenergo project in proportion to their contributions. The enterprise opens great possibilities for cooperation among C.I.S. members as well as for participation by foreign partners in our fuel/energy complex. It is important that we do not lose any time in getting the project under way."
GAS RESOURCE
Moscow believes Yamal gas fields discovered to date hold about 16.6 trillion cu m (586 tcf) of "explored" (proved plus probable) reserves. That's about 3/2 times recent estimates of U.S. proved gas reserves--169.3 tcf.
The Yamal Peninsula is credited with about one third of explored gas reserves in the entire C.I.S.
Most of Yamal's biggest fields were found in the 1970s. In 1985, Moscow issued orders calling for the peninsula to supply 14 billion cu m (494 bcf)/year to Russian areas west of the Ural Mountains by 1991 and as much as 135 billion cu m (4.77 tcf) in 1995.
But Yamal still has no significant commercial gas flow. The tiny volume that is produced is used for field development and the needs of nearby worker housing.
Environmental concerns, along with the huge cost and difficulty involved in building a railroad north across the swampy terrain from the peninsula's southern base to the Bovanenkov area stalled field development for at least 5 years.
To minimize environmental damage to Yamal's tundra, often no more than a few feet above sea level, new plans call for routing the four proposed pipelines southwest, crossing beneath the Raidaratskaya Gulf. Russia has no experience in building, operating, or repairing large diameter underwater pipelines and has had difficulty even with small diameter lines in shallow Caspian Sea waters.
The Yamal transmission system would carry gas west from the peninsula's southern base across the northern end of the Ural Mountains and on to Vorkuta, Inta, Pechora, Syktyvkar, Kotlas, and on southwest toward Moscow.
FIRST DEVELOPMENT
First field slated for development on the marshy Yamal Peninsula, where almost 90% of the gas prone area is covered by water, is supergiant Bovanenkovskoye. Lying nearly 300 miles north of the Arctic Circle near the Kara Sea coast, Bovanenkovskoye is by far the largest of about 20 fields on the peninsula.
Bovanenkovskoye, discovered in 1971, probably could provide more than 100 billion cu m (3.53 tcf)/year when peak production is reached. Nearby fields likely would be able to boost that figure by at least 50%.
Moscow has estimated Bovanenkovskoye's explored reserves at 2.239 trillion cu m (79 tcf). The field is believed to hold an additional 1.912 trillion cu m (67.5 tcf) of possible reserves.
Gas/condensate pay zone depths range from 528 m (1,732 ft) in the Cenomanian (upper Cretaceous) to 2,100 m (6,890 ft) in the lower Cretaceous. Still deeper, in the Jurassic, at least four gas/condensate zones have been discovered, two of which have oil rings.
Bovanenkovskoye's area at the top of the Cenomanian is 35 by 15 km.
Calculated absolute open flow of Bovanenkovskoye wells has ranged from about 2 MMcfd to more than 74 MMcfd.
NEARBY FIELDS
Other giant gas fields and several smaller ones are within 10-50 miles of Bovanenkovskoye. Their production could be added quickly to the volume flowing south from the neighboring supergiant.
Like Bovanenkovskoye, giant Kharasavei and Kruzenshtern fields are on the Yamal Peninsula's 130 mile long Nurmansky megaarch. Both fields extend offshore beneath the Kara Sea.
Moscow has estimated Kharasavei's explored reserves at 30.4 tcf plus an additional 14.3 tcf of possible reserves. Kruzenshtern's explored reserves were placed at about 12.8 tcf plus 26.7 tcf of possible reserves.
South of Bovanenkovskoye is Neitinskoye field with 1.8 tcf of explored and nearly 1.7 tcf of possible reserves.
Two satellite fields, Severo-Bovanenkovskoye and Vostochno-Bovanenkovskoye, lie just north and east, respectively, of the Yamal Peninsula's supergiant.
Looking further to the future, Russia can tap probable and possible supergiant gas fields on Yamal's Kara Sea shelf. It's been speculated that Rusanovskoye, less than 70 miles off the peninsula's northwest tip, may hold reserves twice as large as Shtokmanovskoye, discovered in the Barents Sea in 1988 with reserves estimated at 4 trillion cu m (141.2 tcf).
South of Rusanovskoye and northwest of Kharasavei is Leningradskoye field, which also may be a supergiant.
Reserves in Rusanovskoye and Leningradskoye should be considerably easier to tap than those in Shtokmanovskoye, which is about 200 miles west of big Novaya Zemlya Island and almost 300 miles north of the nearest point on the European Russian mainland. Also, Rusanovskoye is believed to lie in waters no more than 50 m (164 ft) deep vs. 200-300 m (656-984 ft) for Shtokmanovskoye.
A joint venture including Norsk Hydro AS and Conoco Inc. is studying development of Shtokmanovskoye (OGJ, Oct. 21, 1991, p. 40), but the field may not go on production before 2000. Russia plans to call for international tenders covering joint venture development of Novoportovskoye oil and gas/condensate field near the southeast base of the Yamal Peninsula in a matter of months (OGJ, Aug. 10, p. 21).
It was noted that the winner of the Novoportovskoye tender will have the opportunity to participate in future tenders for exploration, development, and production on the Yamal Peninsula, including Bovanenkovskoye field, and Kara Sea prospects.
THE GAS MARKET
Russia believes it will have a growing export market for Yamal gas in eastern and western Europe well into the next century. But most Yamal gas will be needed by large C.I.S. power generating and municipal heating plants.
Plans also call for construction of small gas powered power generators and mobile gas fueled boilers for heating in sparsely populated areas of western Siberia's northern sector, including the Yamal Peninsula. Moscow has assured local officials these units will be reliable and environmentally clean.
In its European areas alone, Russia expects electrical power demand will require construction and modernization of conventional thermal power plants capable of providing an additional 15-25 million kw of capacity by 2000 compared with 1990.
Part of Russia's new power generating capacity will be obtained by building more nuclear plants and increasing the efficiency of present coal and gas fueled plants. Plans also call for greater development of coal gasification.
But most of the gain in Russian power generation through 2010 will have to come from new gas fired plants.
It's estimated that Russia and other C.I.S. nations will need an additional 52-60 billion cu m (1.84-2.12 tcf)/year of gas to meet their power and heating needs in 2000. Increased gas usage for these purposes is expected to reach 3.88-4.24 tcf in 2010 compared with 1990.
ENERGY PRODUCTION
Russia sees no way oil or coal can meet its growing energy demand during the next 10-15 years.
The federation's crude and condensate flow plummeted to 9.22 million b/d in 1991 from 10.36 million b/d in 1990. Production during first half 1992 skidded another 13%, or about 1.28 million b/d vs. the same 1991 period, according to recently released official figures.
Moscow economists believe Russian 1992 crude/condensate production will average as little as 8 million b/d. They expect a further decline in 1993.
Oil products production has dropped along with crude and condensate flow. During first half 1992, Russian gasoline production fell 8% from the same 1991 period, diesel fuel 6%, and mazut (heavy fuel oil) 5%.
As a result of lower oil production, Russian crude exports during first half 1992 slid to 24 million metric tons (963,000 b/d), down 18% from the same 1991 period. Refined products exports plunged "50% or more."
Russia's coal production and exports also have declined sharply since 1989. Coal production during first half 1992 was 2% below the level for the same 1991 period, and exports fell by 8.1 million tons.
Power generation has recently been stagnant.
Natural gas is the only primary Russian fuel that hasn't registered significantly lower production during the past several years. Flow increased to nearly 22.7 tcf in 1991 from 22.6 tcf in 1990, although total C.I.S. production slipped slightly because of declines in Turkmenistan, Ukraine, and Azerbaijan. Russia produced more than 79% of all C.I.S. gas last year.
Moscow reported Russian gas flow during first half 1992 was 324 billion cu m (11.44 tcf). That's about the same as in the first 6 months of last year.
However, with Russian domestic consumption continuing to rise, the federation's gas exports fell by 4% in first half 1992 vs. the comparable 1991 period.
Figures compiled by Cedigaz, Paris, underscore the former U.S.S.R.'s clear dominance in world gas trade moving by pipeline. That country accounted for 44% of a total 244.68 billion cu m (8.64 tcf) moved in international trade during 1991, up about 4% from 235.29 billion cu m (8.308 tcf) traded in 1990.
Russia's 1991 gas production increase of only 0.4% and its expected minimal gain at best during 1992 are due mainly to the peaking of flow from western Siberia's supergiant Urengoi field straddling the Arctic Circle and failure of supergiant Yamburg field to the northwest near the Ob Gulf to meet production goals.
Greatly reduced capital spending and inadequate equipment deliveries have dealt a severe jolt to Russian gas flow. Nevertheless, with oil and coal production falling, even stable gas flow has increased the fuel's share of total Russian energy production and consumption to a record high.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
