Gazprom, BASF JV boosts Siberian gas production

ZAO Achimgaz, a JV of Russia's Gazprom and German chemical firm BASF, began gas and condensate production Nov. 12 from the Achimov deposit in Siberia.

Nov 12th, 2008

By OGJ editors
HOUSTON, Nov. 12 -- ZAO Achimgaz, a joint venture of Russia's OAO Gazprom and Germany-based chemical firm BASF AG, began gas and condensate production Nov. 12 from the Achimov deposit in Siberia, about 3,500 km northeast of Moscow.

A second JV project, Yuzhno Russkoye gas field, was commissioned in 2007 and supplies more than 50 million cu m/day of gas from the Achimov formation in the Urengoy deposit.

The JV plans to recover up to 200 billion cu m of gas and 40 million tonnes of condensate from Section 1A of the Achimov formation over 40 or so years. The annual gas production target during the plateau phase is 7.5 billion cu m, it said.

Although the two companies have a history of cooperation through JVs in Europe since 1990, the two Siberian fields are important symbolically, said BASF chairman Jurgen Hambrecht: "With these projects, for the first time a European company (BASF), is playing a central role in natural gas production in Siberia…. That means more supply security for Germany and all of Europe."

ZAO Achimgaz was founded in July 2003 as a 50:50 JV of Gazprom subsidiary OOO Gazprom Dobytscha Urengoi and BASF subsidiary Wintershall Holding AG of Kassel, Germany.

Developing Achimov
The Achimov reserves lie at a depth of 3,600-3,800 m and have a much more complex structure than the overlying rock formations which have been producing so far, the JV reported. It said it plans to develop the first section of the Achimov horizon of the Urengoy deposit, which Gazprom Chief Executive Alexei Miller said was "far more complex to develop than the traditional Senoman and Valendis strata."

The gas field is one of the largest in Russia.

"A gas treatment facility and three gas and condensate wells are in operation at Section 1A of the Achimov, providing 1.5 million cu m/day of gas. In 2009 the field is set to produce almost a billion cu m of gas and about 300,000 tons of condensate," the JV said.

"We will reach maximum production there of 25 billion cu m/year of gas by mid-2009, 2 years earlier than originally planned," said Hambrecht. The JV has drilled more than 100 production wells in developing Yuzhno Russkoye. In the final phase 142 wells will be drilled.

Gazprom currently delivers about 40 billion cu m/year of gas to Germany, so the Yuzhno Russkoye and Achimgaz deposits alone could supply all Russian gas exports to Germany for another 20 years, the JV reported.

European projects
BASF and Gazprom also plan to invest several billion euros in European natural gas infrastructure in the coming years, including the planned Nord Stream Baltic Sea pipeline, expansion of the German transport system, and the construction of new gas storage facilities.

Two planned gas pipelines on the German mainland would transport Russian gas for Nord Stream: the OPAL (Ostsee-Pipeline-Anbindungs-Leitung—Baltic Sea pipeline link), which is to transport gas from the Baltic Sea coast south to the German-Czech border, and the NEL (Norddeutsche Erdgas-Leitung—Northern German gas link), which will transport gas to the West. When Nord Stream is completed in 2011, it will carry up to 55 billion cu m of gas to Germany from Russia.

Gazprom and Wintershall have invested €3 billion in the construction and expansion of a pipeline system and of gas storage facilities.

In addition, declaration of intent was recently signed to extend the existing primary supply agreement to 2043 ahead of schedule, guaranteeing gas traders WINGAS, WIEH, and WIEE more than 800 billion cu m of gas for Europe over the next 35 years.

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