Arctic and Cold Climate Solutions Russian Market Update 2017 4 th Open Dialogue/Network Meeting Stavanger 8 th March, 2017 Vladimir Ryashin
License Areas in Russian Arctic Discovered reserves - oil 585 mln.t, gas - 10,4 trln.m3
Arctic Challenges Arctic Conditions pose major challenges for the development of offshore hydrocarbon fields. The principal among these are: Nature and climate: Very cold winter and long polar night; Permafrost; Drifting sea ice (ice floes may travel up to speed 2 km/hour); Limited visibility (less than 500 m) due to fogs and blizzards; Wind speed above 15 km per second. Technology: Design, construction and maintenance of vessels, offshore platforms, loading and transport systems, and equipment capable of operating efficiently in Arctic conditions; Lack of proven technologies and engineering solutions. Environment: Vulnerability of the marine and costal environment to oil pollution; Population of marine mammals and migrating birds; Logistic: Insufficient and inadequate infrastructure to establish and support offshore operations; An integral system for monitoring of ice conditions will be needed in order to ensure regular and sustainable shipments of hydrocarbon export.
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Technology vs Availability of the Russian Continental Shelf for Development
CURRENT STATUS OF YUZHNO-KIRINSKOYE GAS & CONDENSATE FIELD DEVELOPMENT (SAKHALIN III) С1+С2 reserves of the Yuzhno-Kirinskoye field amount to 563.9 billion cubic meters of gas and 71.7 million tons of gas condensate. Operating Company Gazprom Dobycha Shelf VNIIGAZ is engineering contractor. QUANTITY OF PRODUCTION WELLS 37 DESIGN GAS PRODUCTION RATE 21 bcm PRODUCTION WELLS DRILLING IS PLANNED BY GAZPROM OWN SEMI-SUBMERSIBLE RIGS AS PLANNED, IN 2016: FRONT-END ENGINEERING IS PERFORMED BIDDING DOCUMENTATION IS PREPARED PLAN FOR 2017: STATE PERMISSIONS FOR CONSTRUTION RECEIVED PRODUCTION WELLS DRILIING START FIRST GAS - 2021
SEASONALITY OF OFFSHORE OPERATIONS IN ARCTIC AND SUBARCTIC (based on offshore conditions for Sakhalin-III project)
NOVATEK - Arctic LNG Project A part of the expanded LNG plans in the Arctic is the construction of the Kolskaya Verf («Kola Yard») since 2017 in Murmansk, a construction yard for LNG modules. The new yard will cost $500 million. New Arctic LNG 2 plant near Sabetta sea port on Yamal peninsula could be based on a floating solution designed for the shallow waters of the Ob Bay. NOVATEK is in contact with Kværner about the project. The new Acrtic LNG 2 plant will use the resources of the Salmanovskoye and Geofizicheskoye fields, both located on the eastern bank of the Ob Bay. The total resources of the fields amount to about 380 billion cubic meters Construction plan: - Phase 1 2018-2022; Phase 2 2019-2024; Phase 3 2020-2025. Project engineering: 2015 PreFEED KBR (90%) & Kværner (10%) Cooperation NOVATEK & LINDE AG 2017 Technip & Linde LNG Plant Saipem & Dr.tech.Olav Olsen offshore facilities
Access to both European and Asian markets
Construction of Sabetta sea port is a key component in the project The USK Bridge and Mezhregiontruboprovodstroy (MRTS) are the general contractors for the construction of seaport Sabetta, part of the Yamal LNG project, until 2019. Sea port max capacity: 35 MT of bulk cargo a year round. Estimated cost of the construction project is USD 2.08bn, including USD 1.34bn allocated from the federal budget.
Sanctions are still in force Western oil sanctions imposed in 2014 (by the EU, US and Norway) cover goods, technical assistance and financing of activities related to: Deep-water oil exploration and production Arctic exploration and production Shale-oil projects in Russia It is worth to note that in this context, Sakhalin is not defined as an Arctic region and developments may continue there. However, in August 2015, Yuzhno- Kirinskoye (Sakhalin 3) was put on the US sanctions list, i.e. US companies are now prohibited from supplying technology and equipment to the project. Source: 12 Rystad Energy research and analysis, Lovdata, Norwegian Energy Partners, Norwegian Ministry of Foreign Affairs,
North Caspian Aria - Rakushechnoe Oil Field and Kuvykina Gas Condensate Field Development Rakushechnoe - first oil in 2022 R= 20 mln.t P= 1,1 mln.t/year Challenges: Ambient air temperature - form -40 o C to +40 o C; Ice 4 month; Max thickness 1m; Speed 0,6 m/s; Shallow water max depth 20 m; Currents 110 sm/s. Kuvykina - first gas in 2026 R= 330 mld.m3 P= 6,6 mld.m3/year
Norwegian Energy Partners 2017 Workshops with Gazprom and Novatek September 13 th 2017 2 x ½ day - St. Petersburg - GAZPROM (confirmed) September 14 th 2017 - ½ day - St. Petersburg NOVATEK (TBC) 12-15 September 2017, Saint-Petersburg 13 th International Conference and Exhibition for Oil and Gas Resources Development of the Russian Arctic and CIS Continental Shelf http://rao-offshore.com/
Online Market Reports for Russia (for downloading) For Norwegian Energy Partners: http://norwep.com/market-info/markets/arctic-cold-climate/reports (Username and password is the same as your partner log-in) For Petro Arctic members and all others, there is a direct link here (with username and password): http://norwegianenergypartners.org/arcticcoldclimatesolutions/ (Username is: arctic, Password is: ColdClimate16).
PROMOTING NORWEGIAN ENERGY CAPABILITIES IN INTERNATIONAL MARKETS Vladimir Ryashin, Adviser, Russia vladimir.ryashin@norwep.com