UGS strategy: pursuing higher reliability and flexibility of gas supplies

The Gazprom Board of Directors approved the ongoing efforts pursued by the Company for developing the underground gas storage (UGS) capacities in Russia and abroad. 

Gazprom’s active and planned UGS facilities in Russia

Gazprom’s active and planned UGS facilities in Russia

It was noted that the UGS capacities owned by the Gazprom Group in Russia and abroad helped ensure the reliability of gas supplies to consumers, especially during winter peak demand periods.

In Russia, Gazprom operates a network of 22 UGS facilities with the working gas inventories of above 72 billion cubic meters and the potential maximum daily deliverability of 805.3 million cubic meters by the start of the 2017/2018 withdrawal season. Such a high level of UGS development makes it possible to secure about a third of Gazprom’s daily gas deliveries in the autumn-winter period.

Severo-Stavropolskoye UGS facility

Severo-Stavropolskoye UGS facility

The Company’s priorities in developing the domestic UGS sector are to optimize the operation of gas storage and production facilities, improve the efficiency and flexibility of the UGS network and ensure its further expansion. To this end, Gazprom is active in creating peak shaving UGS facilities with high deliverability rates and a relatively small gas storage volume. The efforts in this area include expanding the Kaliningradskoye, building the Volgogradskoye and designing the Novomoskovskoye UGS facilities.

Gazprom conducts geological exploration to build UGS facilities in the Russian regions with insufficient or no gas storage capacities. For instance, geological exploration is underway along the gas pipeline route from Ukhta to Torzhok and also in the direction of Arkhangelsk in the Northwestern Federal District, in the direction from Omsk to Tomsk in the Siberian Federal District and along the Power of Siberia gas pipeline’s route in the Far Eastern Federal District.

In order to increase the flexibility of export supplies, Gazprom strives to raise the working gas capacity of its UGS facilities abroad to at least 5 per cent of the Company’s annual exports.

At present, the Gazprom Group uses capacities in the following UGS facilities: Haidach (Austria), Rehden, Katharina, Jemgum and Etzel (Germany), Bergermeer (Netherlands), Banatski Dvor (Serbia), and Damborice (Czech Republic). Moreover, additional storage capacities are leased by the Group in Europe with a view to enhance the reliability of supply to European consumers during this autumn-winter period.

Given the growing exports of Russian gas to European countries and the expected start of pipeline gas deliveries to China in 2019, the Company is engaged in developing the existing and creating new gas storage capacities abroad. In this respect, the work is underway to expand the Banatski Dvor UGS facility in Serbia and to study the possibility of creating underground storage facilities in China.

In the CIS, Gazprom intends to gradually increase the daily deliverability of its UGS facilities in Armenia and Belarus. An Action Plan has been prepared by Gazprom and Uzbekneftegaz for cooperation on UGS development in Uzbekistan.

The Management Committee was instructed to proceed with developing the UGS capacities in Russia and abroad.



Gazprom Board of Directors addresses status of major corporate projects

The Gazprom Board of Directors appreciated the work being done by the Company to implement its major investment projects.

It was highlighted that the Company continued to consistently develop the new gas production center in Yamal. Gazprom's resource base in the Peninsula is becoming key for gas supplies to domestic and foreign consumers over a long term. This year, new gas wells and a booster compressor station will be put onstream at Bovanenkovskoye, Yamal's largest field in terms of gas reserves.

Power of Siberia gas pipeline construction

Power of Siberia gas pipeline construction

Gazprom is expanding the northern gas transmission corridor meant for gas supplies from Yamal to Russia's central and northwestern regions as well as into the Nord Stream 2 gas pipeline for export purposes. In particular, construction continues on the linear part of the Ukhta – Torzhok 2 gas pipeline, with 688 of the 970 kilometers completed, and the compressor stations at the Bovanenkovo – Ukhta 2 gas pipeline. In addition, the Company is retrofitting a number of gas pipelines in the Leningrad Region and this year is going to start building new capacities from the Gryazovets gas transmission hub to the Slavyanskaya compressor station (Nord Stream 2's main compressor station) currently under design on the Baltic Sea coast.

The Nord Stream 2 project is proceeding on schedule. At present, work is underway to obtain national permits from Germany, Denmark, Sweden, Finland and Russia for the gas pipeline construction.

Construction is in full swing on TurkStream, another new gas pipeline for Russian gas supplies to Europe. At the onshore section, drilling operations have been completed and pipes have been microtunneled. At the offshore section, a total of 373 kilometers of pipes have been laid along the two strings.

As part of its efforts to establish the gas industry in the east of Russia, Gazprom is active in pre-developing Chayandinskoye, the basic oil, gas and condensate field of the Yakutia gas production center. To date, 86 gas wells and 8 oil wells have been drilled, and industrial, energy and transport infrastructure is under construction. The Company has started to build a pipeline connecting Chayandinskoye to the Eastern Siberia – Pacific Ocean oil pipeline system. Preparations are in progress for the pre-development of the Kovyktinskoye gas and condensate field, the backbone of the Irkutsk gas production center.

Construction is ahead of schedule on the Power of Siberia gas trunkline that will convey gas from Yakutia and the Irkutsk Region to Russia's eastern regions and China. By now, the Company has completed more than 1,095 kilometers of the gas pipeline, which is 50.7 per cent of the overall length of its paramount section from Chayandinskoye to Blagoveshchensk.

Gazprom has moved on to the main stage in the construction of the Amur gas processing plant (GPP), which is an essential element in the technological chain of supplies via Power of Siberia. The Company has launched construction and installation works at the GPP's key facilities – cryogenic gas separation units. Construction continues on a wharf on the Zeya River and railway communications.

In parallel, work is in progress to develop the gas production center on the shelf of Sakhalin Island. Until the year's end, production drilling is planned to be completed at the Kirinskoye field. Upon the hookup of new wells, the field will be gradually brought to its design capacity of 5.5 billion cubic meters of gas a year. Design works are underway with regard to pre-development infrastructure at the Yuzhno-Kirinskoye field.

The priority activities of Gazprom include improving the reliability of gas supply to the Kaliningrad Region. Two new underground reservoirs are coming onstream at the Kaliningradskoye UGS facility soon. Until the end of 2017, it is planned to finish the construction of a liquefied natural gas receiving, storage and regasification terminal.

The Management Committee was instructed to continue the efforts aimed at implementing the Company's major investment projects.



Year-to-date deliveries of Russian gas to Austria exceed full-year total for 2016

A working meeting between Alexey Miller, Chairman of the Management Committee of Gazprom, and Rainer Seele, Chairman of the Executive Board of OMV, took place today in Moscow.

Alexey Miller at working meeting with Rainer Seele, Chairman of Executive Board of OMV

Alexey Miller

The meeting participants addressed bilateral cooperation. It was highlighted that in 2017 the demand from Austrian consumers for Russian gas significantly surpassed last year’s indicator. From January 1 through October 15, 2017, Gazprom had supplied Austria with 6.4 billion cubic meters of gas, up 48.3 per cent or 2.1 billion cubic meters of gas versus the same period in 2016. Moreover, on October 4, 2017, the amount of gas delivered by Gazprom to Austria since the start of 2017 exceeded the full-year total for 2016 (6.13 and 6.1 billion cubic meters, respectively).

The parties discussed the progress with the Nord Stream 2 project aimed at ensuring reliable deliveries of Russian gas to Europe.

Rainer Seele, Chairman of Executive Board of OMV, at working meeting with Alexey Miller

Rainer Seele

Background

OMV AG is Gazprom’s main partner in Austria.

Nord Stream 2 is the construction project for a gas pipeline with the annual capacity of 55 billion cubic meters from Russia to Germany across the Baltic Sea.

 



Gazprom Board of Directors approves revised investment program, budget, and cost reduction program for 2017

The Gazprom Board of Directors approved the revised investment program, budget (financial plan) and cost optimization (reduction) program for 2017.

The key figures of the investment program did not change compared to the version approved by the Gazprom Management Committee in September this year.

Bovanenkovskoye field

Bovanenkovskoye field

Pursuant to the revised investment program for 2017, the overall amount of the Company’s investments will stand at RUB 1,128.576 billion, which is RUB 217.341 billion more than was envisaged in the investment program approved in December 2016. Of that amount, RUB 738.538 billion (up by RUB 112.518 billion) is intended for capital construction, RUB 11.310 billion (up by RUB 11.185 billion) for the acquisition of non-current assets, and RUB 378.728 billion (up by RUB 93.637 billion) for long-term financial investments.

The approved financial plan will provide for a full coverage of Gazprom's liabilities without a deficit.

The revised cost optimization (reduction) program for 2017 includes cost optimization (reduction) measures with an expected cumulative effect of RUB 15.4 billion.

Background

The adjustments to the investment program for 2017 were mainly caused by the increase in spending and long-term financial investments with regard to Gazprom’s priority gas transmission and production projects of strategic importance, including pre-development of the Chayandinskoye and Bovanenkovskoye fields, construction of the Power of Siberia and TurkStream gas trunklines, and development of the gas transmission system in northwestern Russia.

 



Gazprom and Mitsui ink discuss LNG cooperation

A working meeting between Alexey Miller, Chairman of the Management Committee of Gazprom, and Tatsuo Yasunaga, Representative Director, CEO of Mitsui & Co., Ltd., took place today in Moscow.

Working meeting between Alexey Miller and Tatsuo Yasunaga, Representative Director, CEO of Mitsui & Co., Ltd., taking place in Moscow

At meeting

The meeting addressed the ongoing and future partnership between the companies. Particular attention was paid to the progress in the construction of the third train of the Sakhalin II LNG plant and the prospects for cooperation on small- and mid-scale LNG.

Tatsuo Yasunaga, Representative Director, CEO of Mitsui & Co., Ltd., at meeting with Alexey Miller

Tatsuo Yasunaga

Background

Japan’s Mitsui & Co., Ltd. is focused on the development, marketing, distribution and processing of all types of energy products in Japan and overseas, as well as on financial activities.

Gazprom and Mitsui are partners in the Sakhalin II project, which includes Russia's only active LNG plant. The Sakhalin II operator is Sakhalin Energy Investment Company Ltd. (Gazprom – 50 per cent plus one share, Shell – 27.5 per cent minus one share, Mitsui – 12.5 per cent, and Mitsubishi – 10 per cent).

In December 2016 and September 2017, Gazprom and Mitsui signed the Agreement of Strategic Cooperation and the Framework Agreement for cooperation on small- and mid-scale LNG, respectively.

 



Gazprom and Saudi Aramco sign Memorandum of Understanding

Viktor Zubkov, Chairman of the Gazprom Board of Directors, and Amin H. Nasser, President and CEO of Saudi Arabian Oil Company, signed in Moscow a Memorandum of Understanding for international cooperation in the gas sector.

The signing ceremony took place on the margins of the official visit to Russia by Salman bin Abdulaziz Al Saud, King of Saudi Arabia.

The document reflects the intention of the parties to explore the possibilities of cooperation along the entire value chain from natural gas exploration, production, transmission and storage to LNG projects.

 

Background

Saudi Arabian Oil Company (Saudi Aramco) is a state-owned company based in the Kingdom of Saudi Arabia and carrying out a full range of operations related to oil and petroleum products.

 



Gazprom and OMV organize new event within cultural partnership

A new event within the joint cultural project of Gazprom and Austria’s OMV – the theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” – took place today at the Grand Hall of the Dmitry Shostakovich St. Petersburg Academic Philharmonia.

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Violinist Sergey Krylov

This performance became the central cultural event of the 7th St. Petersburg International Gas Forum. Among the guests were Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee, and Rainer Seele, Chairman of the Executive Board of OMV, as well as heads of major international energy companies. Children from social institutions of St. Petersburg and the Leningrad Region were also invited to the event.

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Alexander Medvedev and Rainer Seele

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

This year, the main focus of the “Imperial Capitals: St. Petersburg – Vienna” project was on the legacy of Russian and Austrian poets. Their poetic works gained a new edge in harmony with music. A synthesis of different art forms, eternal plots and modern ways of self-expression demonstrated to the audience the full versatility of the unique cultural heritage of St. Petersburg and Vienna – two imperial capitals.

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Yury Bashmet, People's Artist of USSR

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Actress Ekaterina Shpitsa

Money raised from ticket sales will be donated to a charity foundation that helps children with serious diseases.

In response, the next cultural event within the project will be held on December 14, 2017, at the Imperial Hofburg Palace of Vienna.

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Ekaterina Kondaurova, prima ballerina of Mariinsky Theatre

Theatrical gala performance “Imperial Capitals: St. Petersburg – Vienna. Symphony of Letters and Poems” at Grand Hall of Dmitry Shostakovich St. Petersburg Academic Philharmonia, new event within joint cultural project of Gazprom and Austria’s OMV

Opera singer Martina Fender

Background

Along with their partnership in energy, Gazprom and OMV also cooperate in the cultural sphere.

Several important cultural and social projects have been implemented with support of the Gazprom Group and OMV in the last years.

For over 10 years, the Gazprom Group and OMV have supported the large-scale international Open World project for children, which is implemented by the Austrian social foundation Energy for Life under the auspices of UNESCO and UNICEF.

The foundation for the gala event in St. Petersburg was laid on April 1, 2016, when Gazprom and OMV signed a number of documents on the further development of strategic cooperation between the two companies, including the Memorandum of Understanding on the implementation of a joint cultural project.

 



Blue Corridor-2017 Rally concludes in St. Petersburg

The Blue Corridor-2017: Iberia – Baltia NGV Rally concluded today in St. Petersburg as part of the 7th St. Petersburg International Gas Forum.

Blue Corridor-2017 Rally concludes in St. Petersburg

Blue Corridor-2017 Rally concludes in St. Petersburg

The closing ceremony was attended by Vitaly Markelov, Deputy Chairman of the Gazprom Management Committee, and Klaus Schaefer, Chief Executive Officer, Member of the Management Board of Uniper.

Vitaly Markelov (center) at closing ceremony for Blue Corridor-2017: Iberia – Baltia NGV Rally

Vitaly Markelov (center)

The 11th Blue Corridor race kicked off in Lisbon on September 18. The route of the rally promoting the use of natural gas as a vehicle fuel crossed 12 countries: Portugal, Spain, France, Italy, Switzerland, Lichtenstein, Germany, Poland, Lithuania, Latvia, Estonia, and Russia. The racers traveled over 5,300 kilometers in 19 days.

The overarching theme of the rally was the use of liquefied natural gas (LNG) in heavy vehicles.

Blue Corridor-2017 Rally concludes in St. Petersburg

Blue Corridor-2017 Rally concludes in St. Petersburg

LNG-powered trucks successfully completed every stage of the rally. Among those trucks were Russia’s first certified LNG-powered vehicles: the KAMAZ truck and the Ural NEXT workshop truck with a crane manipulator. The prototypes of the trucks were developed by the KAMAZ concern and the GAZ Group in conjunction with Gazprom. This year, Gazprom’s subsidiaries will commence the pilot operation of those and other Russian-made vehicles powered by LNG.

The rally also involved LNG-powered trucks made by Iveco, Scania, and Minsk Automobile Plant, as well as cars fueled by compressed natural gas (CNG) from such manufacturers as Volkswagen, Seat, and Lada.

Blue Corridor-2017 Rally concludes in St. Petersburg

Blue Corridor-2017 Rally concludes in St. Petersburg

The program of the event included roundtables featuring automakers, representatives of oil and gas companies, members of the expert community, politicians, and the media. This year, discussions took place in Lisbon, Milan, Ulm, Berlin, and Tallinn.

Blue Corridor-2017 Rally concludes in St. Petersburg

Blue Corridor-2017 Rally concludes in St. Petersburg

“Compressed natural gas is widely used in many European countries already, especially for cars. And liquefied natural gas – LNG – has every chance to become just as available and widespread when it comes to trucks.

The Blue Corridor rally has shown once again that natural gas is used as a vehicle fuel across the entire European continent, effectively reducing harmful emissions and improving the environment,” said Vitaly Markelov.

Blue Corridor-2017 Rally concludes in St. Petersburg

Blue Corridor-2017 Rally concludes in St. Petersburg

Background

The 7th St. Petersburg International Gas Forum is being held as part of the Energy Efficiency and Energy Development International Forum 'Russian Energy Week.'

The production and marketing of natural gas as a vehicle fuel is a strategic priority for Gazprom.

Blue Corridor is an annual international rally for natural gas-fueled vehicles. The rallies supported by Gazprom, Germany's Uniper, and the Russian National Gas Vehicle Association have been held since 2008. The project is meant to demonstrate the environmental, technical, and economic advantages of natural gas over conventional fuels and to showcase the variety of modern factory-built gas equipment.

Uniper SE is focused on power generation and global energy trading.

Gazprom and Uniper collaborate on international gas supply and transportation projects and implement scientific & technical and social & cultural cooperation programs.

 



Gazprom to expand network of CNG stations along key highways

Vitaly Markelov, Deputy Chairman of the Gazprom Management Committee and Sergey Kelbakh, Chairman of the Board of the Russian Highways State Company (Avtodor), today signed at the 7th St. Petersburg International Gas Forum an Action Plan (Roadmap) to develop the natural gas filling infrastructure along the federal highways under the responsibility of Avtodor.

Sergey Kelbakh, Chairman of Board of Russian Highways State Company (Avtodor), and Vitaly Markelov signing Action Plan (Roadmap) at 7th St. Petersburg International Gas Forum to develop natural gas filling infrastructure along federal highways under Avtodor’s responsibility

Sergey Kelbakh and Vitaly Markelov at signing ceremony

In accordance with the Roadmap, Gazprom plans to build new compressed natural gas filling stations (CNG stations) and cryogenic filling stations (LNG/CNG stations) on highways with high cargo and passenger traffic and near large road junctions. Avtodor will allocate land plots for Gazprom’s gas filling facilities.

Sergey Kelbakh, Chairman of Board of Russian Highways State Company (Avtodor), and Vitaly Markelov signing Action Plan (Roadmap) at 7th St. Petersburg International Gas Forum to develop natural gas filling infrastructure along federal highways under Avtodor’s responsibility

Sergey Kelbakh, Chairman of Board of Russian Highways State Company (Avtodor), and Vitaly Markelov signing Action Plan (Roadmap) at 7th St. Petersburg International Gas Forum to develop natural gas filling infrastructure along federal highways under Avtodor’s responsibility

Stage one (until 2021) envisages the construction of gas filling infrastructure on the M-11 Moscow – Saint Petersburg highway (section connecting the North – South and Europe – Western China international transport routes). CNG stations and cryogenic filling stations are also planned to be built along the M-1 Belarus and M-4 Don highways and the Central Ring Road in Moscow and the Moscow Region, with up to 32 gas filling facilities to be potentially created.

At stage two, (2021–2030) gas filling stations will be constructed along the M-1 Belarus and M-3 Ukraine highways, the Central Ring Road, the Moscow – Kazan – Russian-Kazakh border section of the Europe – Western China corridor and the Kazan – Omsk – Far East section of the West – East route, with up to 29 gas filling facilities to be additionally created.

Gazprom to expand network of CNG stations along key highways

Visual rendering of CNG station

 

Background

The 7th St. Petersburg International Gas Forum is being held as part of the Energy Efficiency and Energy Development International Forum 'Russian Energy Week.'

The production and marketing of natural gas as a vehicle fuel is one of Gazprom's priorities. A special-purpose company, Gazprom Gazomotornoye Toplivo, was established for ensuring the continuous development of the NGV market.

The Russian Highways State Company (Avtodor) was established in 2009. The company aims to expand the network of toll highways, attract extrabudgetary investments, and develop the roadside service infrastructure.

Avtodor carries out trust management over the following highways: M-1 Belarus, M-3 Ukraine, M-4 Don, and M-11 Moscow – St. Petersburg (currently under construction). The company is also responsible for the construction of the Central Ring Road.

Avtodor is engaged in a number of promising projects, such as the construction of the Europe – Western China international transport corridor. The total length of the route in Russia will be around 2,300 kilometers.

 



Gazprom and FASIE to support promising projects of small businesses

Oleg Aksyutin, Member of the Management Committee, Head of Department of Gazprom, and Sergey Polyakov, Director General of the Foundation for Assistance to Small Innovative Enterprises (FASIE), today signed at the 7th St. Petersburg International Gas Forum an Agreement for scientific and technical cooperation and partnership.

Sergey Polyakov, Director General of Foundation for Assistance to Small Innovative Enterprises (FASIE), and Oleg Aksyutin signing Agreement for scientific and technical cooperation and partnership at 7th St. Petersburg International Gas Forum

Sergey Polyakov and Oleg Aksyutin at signing ceremony

Gazprom and FASIE will join forces to support small enterprises that develop innovative products consistent with the Company’s technological priorities. Such priorities include hydrocarbon prospecting and exploration, gas production, processing, marketing and use, and technologies aimed at improving the efficiency of gas storage and transportation practices.

In accordance with the document, Gazprom will provide advisory support in the course of R&D and engineering and will take part in the implementation and drafting of FASIE’s programs. In its turn, FASIE will contribute to the Company’s top-priority innovative projects and will attract small hi-tech innovative businesses to the competitive landscape of Gazprom’s suppliers.

Background

The 7th St. Petersburg International Gas Forum is being held as part of the Energy Efficiency and Energy Development International Forum 'Russian Energy Week.'

The Foundation for Assistance to Small Innovative Enterprises is a state-owned non-commercial organization that supports small innovative businesses and fosters effective coordination between small enterprises and industry majors.

The Foundation implements innovative development programs to facilitate the creation and development of hi-tech companies with the possibility of co-funding their projects.