June 16, 2008

Gazprom Plans to Produce 565 Bcm Gas in 2010

MOSCOW. June 16 (Interfax) - Gazprom (RTS: GAZP) plans to be producing 565 billion cubic meters of gas in 2010, Gazprom's gas, gas condensate and oil production department chief, Vasily Podyuk, told a briefing.

Gazprom earlier aimed to be producing 570 bcm in 2010.

Sergei Pankratov, deputy head of the gas monopoly's strategic development department, told the briefing that the company was planning to increase gas production to 650-670 bcm by 2020. He said this include gas to be produced in Eastern Russia.

Production should rise to 610-615 bcm in 2015, Pankratov said.

Pankratov said Gazprom estimated it would need to invest 8 trillion-10 trillion rubles or "an average of 700 billion rubles per year" in new production and transportation capacity by 2020.

"The main burden will be prior to 2013 due to the need to develop projects on the Yamal peninsula, offshore projects and Eastern projects," he said. Around half of the investment will be in the development of gas transportation and 30% will go into production, Pankratov said.

Pankratov said Gazprom expected to be producing around 30 bcm of gas in Eastern Russia by 2020.

Gazprom is mainly involved in preparatory and exploratory work in the region, in particular the Krasnoyarsk territory and Irkutsk region, at present, Pankratov said. "It's not yet easy to forecast precisely how much we'll produce in the East - that will have to wait until all the data is verified. But for now we are expecting to produce around 30 bcm there by 2020," he said.

Vasily Podyuk said regarding the Chayanda field in Yakutia, which the government has handed to Gazprom as the owner of the Unified Gas Transportation System, that Gazprom planned to start operations there by developing the deposit's oil rims.

"The project to develop Chayanda is being drafted. We'll initially be developing the field's oil rims," Podyuk said.

Chayanda is due to go on stream in 2016, he said.

Chayanda contains 1.2 trillion cubic meters of C1+C2 gas and 50 million tonnes of oil.

Gazprom received the license without having to bid at a tender, but will have to pay 8 billion-10 billion rubles compensation.

The government on May 6 decided to hand Gazprom another nine fields containing almost 2.9 trillion cubic meters of gas in the Yamal-Nenets Autonomous District, Kara Sea shelf and Sea of Okhotsk.

Podyuk said Gazprom planned to put those fields into production after 2020. "We're working on obtaining the licenses for now. The fields will be put on stream after 2020," he said.

Podyuk said gas production on the Yamal peninsula could total 250 bcm-300 bcm after 2020.

Sergei Pankratov said that Gazprom aimed to be producing around 300 billion cubic meters of gas at offshore fields by 2020. he said total capacity at offshore sites "will enable us to produce around 300 bcm. That should give us growth of around 100 bcm by 2020," he said.

Gazprom's main offshore projects are Shtokman, in the Barents Sea, and fields in the Ob and Tazov bay areas.

Pankratov said that Gazprom's executive board had approved a justification of investment for the complex development of the Shtokman field and that detailed engineering was under way.

Vasily Podyuk, for his part, said that "in accordance with the program for the development of the mineral resource base in the period to 2030, and the program for Russian offshore hydrocarbons development to 2030, it is planned in the period 2007-2010 to grow the offshore reserves by more than 2.2 trillion cubic meters of gas and 90 million tonnes of oil."

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