The last remaining stable sector of Russia's energy industry is getting shaky.

Gas flow, which did not follow the sharp decline in Russian oil, coal, and refinery production in 1988-92, his slumped in recent months.

The nation's gas production in the first 6 months of this year was down less than 2% from the same 1992 period. But June-August flow skidded about 5% from the same 1992 period.

Flow from western Siberia's supergiant Urengoi field, considered the world's largest gas field, has started to fall below plan. Urengoi has until recently accounted for is much as 45% of Russia's gas production.

Preliminary estimates show that Urengoi, astride the Arctic Circle, likely will provide 273 billion cu m (9.64 tcf of gas in 1993. Moscow planners had called for 280 bcm (9.88 tcf).

Urengoi's 1994 production also is expected to fall short of target by another 5 bcm (176.5 bcf). Officials say the field's reserves are still big enough to maintain peak flow, but reservoir pressures are dropping. Only nine of 15 required compressor stations have been built.

Money problems

Moscow had hoped that giant Pestsovoye field, just north of Urengoi, would be able to make up for Urengoi's production shortfall. But Pestsovoye development will require 100 billion rubles at today's current value "and even more when our new round of inflation is taken into consideration," the Moscow newspaper Delovoi Mir declared.

"There is nowhere to obtain this amount of money either now or in the foreseeable future," Delovoi Mir said.

"This chronic lack of funds is one of the main reasons development and exploitation of Pestsovoye has been postponed from 1995, as originally planned, to 1977 at the earliest."

The newspaper said the delay in placing Pestsovoye on stream means a loss of about 27 bcm (953 bcf)/year in gas flow, along with about 30% as much crude as Urengoi produces and 10% as much condensate.

Delovoi Mir suggested development of western Siberia's far northern gas fields might be hastened by creating a joint stock company controlled by Russian government agencies but including foreign investors.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.

Russian gas production hits hydrocarbon slide

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