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Yamal Megaproject 2

2 1 Yamal Megaproject

The Yamal Peninsula is a strategic oil- and gas- of fields onshore and offshore Yamal is crucial for se- bearing region of . Commercial development curing Russia’s gas production build-up beyond 2010.

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Field Pre-Development Scheme for the Ob & Taz Bays and the Yamal Peninsula

1 Yamal Megaproject 2

Reserves and Resources of Yamal tion, including the gas industry. This provoked 11 gas and 15 oil, gas and condensate fields with the necessity to introduce amendments into the approximately 16 tcm of explored and preliminary draft Program. estimated gas reserves (ABC1+C2) and nearly 22 In 2007 jointly with the YaNAO Admi- tcm of in-place and forecast gas reserves (C3+D3) nistration amended the draft Program using the have been discovered on the Yamal Peninsula and results of long-lasting studies with regard to the in its adjacent offshore areas. Reserves of conden- creation of a scientific framework for engineering, sate (ABC1) are estimated at 230.7 mln t and those technological, environmental and technical solutions of oil – 291.8 mln t. aimed at developing fields and constructing gas Gazprom Group holds the development licenses pipelines on the Yamal Peninsula. for the Bovanenkovskoye, Kharasaveyskoye, Novo- The draft Program provides a detailed review of portovskoye, Kruzenshternskoye, Severo-Tambey- the Yamal feedstock base status and its develop- skoye, Zapadno-Tambeyskoye, Tasiyskoye and Maly- ment prospects, as well as technical and technolog- ginskoye fields. ical aspects of field development and hydrocarbon In terms of gas reserves (ABC1+C2) the Bovanen- transportation and production, social kovskoye field is the most significant one on the Yamal development, industrial and environmental safety Peninsula (4.9 tcm). The initial gas reserves of the reinforcement. The Program also contains the Kharasaveyskoye, Kruzenshternskoye and Yuzhno- analysis of cost-effectiveness and the substantia- Tambeyskoye fields amount to about 3.3 tcm. tion of state support measures during the Program implementation. Comprehensive Yamal Development Program Yamal’s onshore fields are subject to integrated A draft Program for the Comprehensive Development development by means of creating three production of Fields on the Yamal Peninsula and in the Adjacent zones – Bovanenkovo, Tambey and Southern: Offshore Areas was developed by Gazprom in col-  The Bovanenkovo production zone in- laboration with the Yamal-Nenets Autonomous Okrug cludes three basic fields: Bovanenkovskoye, (YaNAO) Administration in compliance with the as- Kharasaveyskoye and Kruzenshternskoye (the signment of the Russian Federation President and licenses are held by Gazprom Group). The to- Government in 2002. tal production is projected to reach up to 220 In the course of the Program consideration bcm of gas and up to 4 mln t of condensate by ministries and agencies there occurred per annum. considerable changes in the conditions of the  The Tambey production zone involves six national energy sector development and opera- fields: Severo-Tambeyskoye, Zapadno-Tam-

Gas Production Forecast for the Yamal Peninsula and Adjacent Offshore Areas (The development of promising areas offshore Yamal in the Kara Sea is projected to start after 2025)

Year 2011* 2015 2020 2025 2030

Gas production 7.9 75–115 135–175 200–250 310–360 (bcm)

* Production startup on Yamal

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beyskoye, Tasiyskoye, Malyginskoye (the The Company is exploring the possibility of con- licenses are held by Gazprom Group), Yuzh- structing an LNG plant on Yamal. no-Tambeyskoye and Syadorskoye. The total Thus, the maximum annual gas production on production is projected to reach up to 65 bcm Yamal is comparable to the volume of Gazprom’s cur- of gas and up to 2.8 mln t of condensate per rent gas supplies to the domestic market and exceeds annum. twofold the volume of gas exported to the countries  The Southern production zone involves nine beyond FSU. fields: Novoportovskoye (the license is held by Gazprom Group), Nurminskoye, Malo- New Gas Transportation System Yamalskoye, Rostovtsevskoye, Arkticheskoye, In order to secure the conveyance of gas from Ya- Sredne-Yamalskoye, Khambateyskoye, Neyt- mal, a unique, unparalleled in Russia, new-gener- inskoye, Kamennomysskoye (located onshore). ation gas transportation system is planned to be The total production is projected to reach up to created before 2030. Gas from Yamal will be trans- 30 bcm of gas and up to 7 mln t of oil per ported via the 1,100 km long Yamal – sec- annum. tion (5-6 lines) and further along the following di-

Yamal Peninsula — a Region of Strategic Interest for Gazprom

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rection: Ukhta – , Gryazovets – Torzhok, Gryazovets – and Ukhta – Pochinki. The overall distance of Yamal gas transportation by the new pipelines will be in excess of 2,500 km. To be a key element of the UGSS of Russia in the future, the new gas transmission system will convey over 300 bcmpa of gas from the Yamal Peninsula fields and include 27 modern com- pressor stations with the aggregate capacity of 8,600-11,600 MW. At the same time, the total length of linepipe will average 12,000-15,000 km. The creation of the gas transmission system from the Yamal Peninsula will contribute to a full-scale reconstruction of the existing Unified Gas Supply System of Russia.

Implementation of Top-Priority Projects The Cenomanian-Aptian deposits of the Bovanen- kovskoye field rank as a top-priority development project on Yamal. Projected gas production from the field is estimated at 115 bcmpa to be in- Pre-Development of the Bovanenkovskoye field is creased to 140 bcmpa in the long term. To deliver progressing in full swing the produced gas to the UGSS, it is necessary to

Shift Personnel Housing at the Bovanenkovskoye field

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construct the Bovanenkovo – Ukhta gas trunkline system. In October 2006 the Gazprom Management Com- mittee decided to initiate the investment stage of the Bovanenkovskoye field development and the gas transportation system . The first startup complexes rated at over 15 bcmpa for the Bovanen- kovskoye field development and the Bovanenkovo – Ukhta gas trunkline system are to be commissioned in the 3rd quarter of 2011. Between 2007 and 2008 the construction work progressed on paramount facilities of the Bovanen- kovskoye field, including the fire protection, sani- tation & epidemiology, environmental safety, life- support, production & transportation infrastructure, industrial bases. In 2008, 29 facilities – primary construction targets – are planned to be brought onstream (road management and well overhaul bases, operational services, a power plant for internal needs, power lines etc.). Construction of a drilling base, a geo- scientist station as well as of engineering support, «Yekaterina» Drilling Rig operational drilling and gas treatment facilities has been initiated. Additionally, in 2008 nearly 40 km of 1,219 mm Moreover, the first three out of nine drilling rigs concrete coated pipes designed for the operating have been delivered to the Bovanenkovskoye field; pressure of 11.8 MPa were laid during the sum- the preparation for the launch of operational wells mer navigation season at the most complicated drilling in the current year is ongoing. The first drill- system section – the submerged crossing via the ing rig, that will start drilling wells in the field, was Baidarata Bay. manufactured by the leading national machine-build- The Baidarata Bay is specific for its unique envi- ing enterprise URALMASH – Drilling Equipment and ronmental conditions: despite an insignificant depth was named Yekaterina. This is the fifth-generation rig, there are frequent spells of stormy weather, complex the product of the best and most advanced ideas of sea-floor sediments and frost penetration reaching the Russian engineers. the bottom in the winter. These conditions do not In 2008 Gazprom launched the construction of permit working activities in the Bay except for several the Bovanenkovo – Ukhta gas trunkline system. The months a year. pipeline is being constructed with the use of 1,420 The practice of laying a pipeline with such tech- mm high-resistant flow-coated pipes made of K65 nical parameters and in such complex environmental (X80) grade steel designed for the operating pres- conditions is the first of its kind not only in Russia, but sure of 11.8 MPa (120 Ata). The production of these also worldwide. pipes was launched at the Izhora Pipe Plant and the Pipe laying is performed by a state-of-the-art pipe- Vyksa Steel Works on the order of Gazprom. laying vessel, MRTS Defender, designed for offshore

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gas pipeline construction and specifically upgraded for  • the first instance of applying high-re- operation in the Baidarata Bay. sistant 1,420mm pipes of K65 (X80) steel and with smooth interior coating designed Application of New Technologies for 11.8 MPa (120 Ata) of working pres- and Utilization of Advanced Experience sure, as well as new welding technologies During the development of the Yamal Peninsula fields and materials; infrastructure and the creation a new gas transporta-  application of brand new energy saving equip- tion system, it is planned to apply the domestically- ment with an efficiency coefficient equal to developed advanced experience and a number of novel 36-40 per cent. technologies and technological solutions, of which the For over 30 years of operation in the Arctic Gaz- most significant ones are: prom Group has managed to gain valuable experi-  utilization of integrated production infrastruc- ence and to develop, in the harsh environmental ture for gas extraction from the Cenomanian- conditions, gas production and transportation Aptian deposits; technologies that will be used for the Yamal field  application of heat-insulated pipes for wells development. construction and operation with a view to pre- The Russian technologies and experience venting the rocks thawing; can be successfully applied for the implementa-  reduction in the number of monitoring wells tion of various projects in countries with a sub- through combined monitoring over develop- arctic climate, specifically, in Alaska and North ment of various deposits in a well; America.

«Defender» Pipe-Laying Vessel in Operation in the Baidarata Bay

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Transportation Infrastructure 37 crossings completed; a bridge cross- Transportation infrastructure is quite poorly de- ing over the Yuribey River floodplain is nearing veloped on the Yamal Peninsula. Large-scale completion. development of the region is impossible without The crossing is unparalleled in the world’s bridge a relevant build-up of the aviation and railway construction practice both in terms of design and due communication. By now, a significant volume of to the climatic and permafrost conditions of construc- cargo is delivered to the Yamal by sea during the tion and operation. In particular, the crossing is being summer navigation season through the Kharas- constructed without the traditional deposition of soil, avey . which enables to preserve the river floodplain eco- To ensure year-round passenger transportation system. 20-40 m deep wells were drilled to secure to the Yamal Peninsula the new 525 km Obskaya – the reliability of crossing arms under the permafrost Bovanenkovo railroad line is under construction. conditions. Separate sections of the railroad have already The Obskaya – Bovanenkovo railroad thor- been put into operation. Construction of the linear oughfare is to be opened by late 2009. Full deliv- part, , distribution lines and communica- ery of materials and equipment for the Bovanen- tion facilities is in progress. Today, over 260 km kovskoye field development is scheduled for of rail from the Obskaya station to the Khralov 2010. crossing point and 25 km of rail from the Khral- In addition, the Bovanenkovo airport will be con- ov crossing point to the Yuribey crossing have structed by 2012 according to the Bovanenkovskoye already been laid, with 15 station sidings and field development project.

Bridge Construction across the Yuribey River

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Environmental Care  elaboration of environmentally-friendly regimes The Yamal field development provides for the of the area development; entire set of activities aimed at protecting the en-  utilization of technical solutions enabling to de- vironment, preventing and minimizing a potential crease land withdrawal areas with their techni- impact on the ecosystem during construction and cal and biological reclamation; operation works. In particular, these activities in-  prohibition of construction and installation clude: activities during the bird nesting season in  sustained environmental monitoring during spring; field pre-development and operation periods;  water intake through fish protection systems;  planning of technological and special-pur-  arrangement for an unobstructed migration of pose activities mitigating negative impacts on herds through communication lines. the surface air;  utilization of water recycling systems that Social Responsibility prevent from polluting surface reservoirs One of the underlying principles of the commer- and soils; cial development of Yamal is maintaining a reason-  application of special technologies reducing able balance between the industrial development and thermal and mechanical impacts on frozen a solicitous attitude towards the traditional lifestyle of ground; the indigenous minorities.

One of the 37 Bridge Crossings at the Obskaya — Bovanenkovo Railroad

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Such an approach helps to retain conventional damage to the business activities of tundra activities of the natives (, fish- population leading a roving life; ing and hunting), trading of conventional industry  reclamation of lands disturbed during oil and products under long-term agreements with sub- gas exploration in the 1980s so as to increase surface users effectuating their activities on the forage acreage for reindeer herding; Yamal Peninsula, as well as provide the natives  construction of venison and fish processing with indemnity to compensate for business activi- complexes to supply shift personnel with high ties of subsurface users. quality products and employment of the native Pursuant to the draft Program for the Comprehen- population at such complexes; sive Development of Fields on the Yamal Peninsula  ensuring efficient interaction of subsurface and in the Adjacent Offshore Areas, Gazprom’s major users performing their business activities goals in the social area are as follows: in YaNAO and reindeer herders of the Yamal  protection of traditional areas of business ac- Peninsula. tivities, archaeological and cultural sites of the In line with the draft Program, compensations indigenous population; allocated by Gazprom and its subsidiaries to the  utilization of advanced pre-development and YaNAO municipal entities may reach RUB 7.5 bln. operation technologies for oil and gas fields In particular, these funds will be used to con- allowing to minimize environmental risks and struct housing facilities, kindergartens, a school,

Yamal

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a boarding school, a hospital, boiler rooms, power Energy Strategy until 2030 is closely linked with the stations, heat and power supply grids, a water development of a new gas production region – the Ya- supply system, venison and fish processing mal Peninsula. complexes as well as for grasslands reclamation Being most explored and ready for development, purposes. Yamal is located near the existing gas transporta- tion infrastructure, has significant reserves and There is no Alternative to Yamal! favorable production opportunities. It is impos- Sustainable development of the Russian economy and sible anywhere in Russia to create such an oil and welfare of the country are infeasible without large- gas production complex within two decades only. scale development of abundant natural resources. This is the reason why the development of Yamal Implementation of the rates and parameters for natu- will play a pivotal role in the national gas industry ral gas production build-up set forth in the Russia’s development in the 21st century.

Reindeer Races

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For Notes

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For Notes

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