Gazprom strategy: 'Euro-Asian' gas linchpin

• Russian Gas Status [56574 bytes]

He is also convinced that because of its geopolitical "Euro-Asian" location, its 40% share of world natural gas resources, and its supply network connecting Russia with other former Soviet republics and Europe, Russia would become a key energy player.

Domestic gas industry

He insisted, however, that "complete satisfaction of internal needs" was a major element of Gazprom's future strategy. Under the current "energy-saving" scenario, Russian domestic demand for natural gas will absorb about 60% of domestic production.

This scenario is based on the assumption that consumption will stabilize in 1996-97 before returning to its 1991 level by 2005, then start increasing around 2010.

In the long term, the public and private sectors as well as agriculture would be the priority consumers of gas in Russia, and this will require steady development of the gas distribution network and of the gas industry.

Gazprom's development program to 2015 aims to remove bottlenecks and increase productivity, reliability, and environmental safety within the gas industry as well as conserve energy.

For this as well as for development of the northernmost offshore gas field Shtokmanovskoye and Prirazlomnoye oil field, Russia needs both advanced technology and equipment that Vyakhirev hopes to produce on Russian territory through joint ventures with foreign partners.

Gazprom's investment strategy, Vyakhirev said, is mainly directed at rehabilitation of existing installations and construction of new facilities, expansion of Russia's gas distribution grid, and development of gas transmission systems to export Russian gas, as well as participation in gas-fired electric power generation and development of new technologies to modernize the domestic gas industry.

Russian gas exports

Russia, he pointed out, currently supplies natural gas to 17 European countries and covered 18.7% of western Europe's needs in 1995 with a total export of 117.8 billion cu m.

To preserve Gazprom's share in this market, its exports should increase by at least 50 billion cu m the next few years.

To this end, Gazprom is mulling a number of projects, the main one being the Yamal Peninsula-Europe pipeline project.

But the strategy also includes increasing gas exports to the Balkan region and to Turkey to about 58 billion cu m by 2010 from 19.5 billion cu m in 1995.

The link to Turkey, Vyakhirev said, is crucial to the diversification of gas supplies to southern Europe and the Middle East from both the western and eastern sides.

Incensed by the transit difficulties Gazprom is experiencing with its gas pipeline through Ukraine-which, he said he is keen to circumvent by building an alternative route-Vyakhirev called for an international law to protect the integrity of gas transit.

Meanwhile, he advocates a direct gas pipeline to Turkey through the Black Sea. To build this pipeline-which he said will require for the first time pipeline of 34 mm wall thickness laid in more than 2,100 m of water-Vyakhirev said the Dutch firm Heerema would provide its experience in cooperation with Russian scientists.

He also said a feasibility study is under way for the northeastern transit gas pipeline to carry gas to western Europe through Finland, Sweden, and Denmark.

Russian gas resources

Vyakhirev told the symposium that Russian unexplored gas resources in 1995 totaled 48.900 trillion cu m, of which 45.1 trillion cu m are onshore-10% in European Russia, 78% in western Siberia, and 4% in eastern Siberia and the Far East. Of the unexplored gas resources, 42.1% are offshore.

Proven Yamal gas reserves are now estimated to be at 10.2 trillion cu m. Out of 27 Yamal gas prospects, the largest four are "ready for exploration:" Bovanenkovskoye, Hara- saveiskoye, Krusenshternskoye, and Novoportovskoye.

Western Siberian gas fields account for 90% of Russia's current gas production and planned production growth.

New production capacity to meet growing demand should come from the Nadim-Pur-Taz region.

Here, development has begun on Zapadno-Tarkosalinskoye, Yubiley- noye, and Kharvutinskoye gas fields.

During 1997-99 production is to start up in Yamspveyskoye and Zapolyarnoye gas fields.

By 2005, production from these fields combined is expected to reach 160-170 billion cu m/year.

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