Translated material
Yamal paradox
Gazprom reduces investments in the development of the Bovanenkovskoye field
Deputy Chairman of the Gazprom Board of Directors for Production Issues Alexander Ananenkov yesterday held an off-site meeting on the development of the Bovanenkovskoye field. It should give a start to the development of gas resources of a new province - the Yamal Peninsula - and become a worthy replacement for the depleting reserves of the Nadym-Purtazovsky region. “As a result of the meeting, decisions were made to complete the development of a set of regulatory documentation, design system-forming facilities, construct and manufacture equipment for the development of fields on the Yamal Peninsula and gas transportation using domestically produced technologies, materials and equipment,” Gazprom’s press service reported.Commissioning of Bovanenkovo is officially scheduled for 2011, when Gazprom's portfolio should receive the first 15 billion cubic meters of gas from the field. Time to implement this complex technical and investment task is not only running short, it can be said to be absolutely non-existent. However, from the memorandum for the issue of Eurobonds for 1.5-1.7 billion euros, which should be placed before the end of this week, investors learned that in 2007, as part of an investment program for the development of the Bovanenkovskoye and Kharasaveyskoye fields worth almost 30 billion dollars, only 26.2 billion rubles were provided. Moreover, as part of the budget adjustments, this meager amount by the standards of the project was reduced to 25.4 billion rubles. There is no need to talk seriously about the funds that are supposed to be allocated to prepare for the construction of a gas pipeline from new fields in Yamal (the new Bovanenkovo-Ukhta system), and there is no need at all: management was going to allocate only 400 million rubles for these purposes. and only in the middle of the year increased funding to 1.4 billion rubles.
Back in January 2002, the Gazprom board identified the Yamal Peninsula as a region of the company’s strategic interests. The total reserves of the largest fields of Yamal - Bovanenkovskoye and Kharasaveyskoye, as well as the Novoportovskoye field, licenses for the development of which belong to Nadymgazprom LLC (a 100% subsidiary of Gazprom OJSC), amount to 5.9 trillion cubic meters of gas, 100.2 million tons condensate and 227 million tons of oil. Their development should ensure gas production on the peninsula in the amount of 250 billion cubic meters per year.
At the same time, the board of Gazprom desperately delayed making a decision on the timing of putting the fields into operation and only this fall scheduled the commissioning of Bovanenkovo for 2011. The indecision can be explained simply: gas production in Yamal and the creation of infrastructure for its transportation requires revolutionary technical solutions and huge funds.
It is characteristic that until now Gazprom has not announced the volume of investments required to commission fields on the peninsula. Previously, the concern's management estimated comprehensive investments in the Yamal fields at $79 billion until 2030, of which two-thirds should be invested in the first ten years. Since then, prices for pipes, equipment and contracting have increased significantly. According to the most conservative estimates, 1,200 km of the Bovanenkovo-Ukhta gas pipeline with a design capacity of 60 billion cubic meters per year (one line out of four) will cost $12-15 billion. Plus, solving the problem of icebergs in the section where the gas pipeline will run along the bottom of Baydaratskaya Bay .
However, it is quite possible that the management of the gas monopolist expects to receive another delay for the commissioning of Yamal due to a sharp decline in demand for gas within Russia. It was for this purpose that Gazprom desperately lobbied for the introduction of long-term contracts for domestic consumers with a price formula based on equal profitability of gas sales on the domestic market and exports to Western Europe. The controversial principle, on the one hand, should give the concern additional income to finance new production facilities, and on the other, reduce consumption. Whether this will be an incentive to improve the country's energy efficiency or will turn out to be a dead end for fragile economic growth is difficult to say, because no one has conducted any serious research on this matter before making a decision. There is only the experience of neighboring Ukraine, where the increase in gas prices for industrial consumers to only $130 per thousand cubic meters practically buried gas chemistry.