Project Pechora LNG
Press area
24.09.2012 Close-out meeting of the working group

September 24, 2012 close-out meeting of the working group was held in Naryan-Mar on the management of pre-investment studies on LNG production on the territory of Nenets autonomous district based on Kumzhinskoye and Korovinskoye gas-condensate fields. p>

Under the chairmanship of NAD Governor Igor Fyedorov the representatives of Alltech and “Pechora LNG” LLC Groups, in particular, President of ALLTECH Group Dmitry Bosov, Director of Investment Department of ALLTECH Group Vladimir Mikulik, Development Director of the “Pechora LNG” project Stanislav Abramov, Technical director Victor Okorokov and the other specialists, representatives of Department of Gas, Gas Condensate and Oil Production JSC “Gazprom” - Deputy Head of Department methods and technology of the offshore development Mikhail Basarygin and chief of Management department methods and technology of the offshore development Mikhail Greshnyakov; “Gazprom export” LLC representative Alexander Petrov; NAD Administration representatives represented by first deputy district Head of the NAD Administration Alexander Shanygin, Deputy Head of the NAD on infrastructural development Yan Berlin, Head of Department for natural resources and environment NAD Igor Mikhailov, Head of Construction Department housing and community amenities Yury Teltevsky and Head of the NAD representation office affiliated to the RF government Sergey Kokarev.p>

In the course of workshop chief of department technical and engineering design and chief project engineer Igor Stepanov (JSC “Gyprospezgaz”) represented the results of pre-investment studies.p>

“Gyprospezgaz” JSC representatives have reviewed and analyzed 12 options of the project execution “Pechora LNG”, all these options make provision for, particularly but not exclusively, capabilities to increase the raw materials source and different options of the construction of LNG plant (both ground and sea-based, either on floating structure or GBS), as well as different price scenarios for oil and LNG. p>

Pursuant to Project Schedule developed by “Gyprospezgaz” JSC, start-up of LNG plant is scheduled for Q4 2018 provided that commencement of the design phase will be in Q1 2013. Volumes of the natural gas extraction will make up from 4.5 to 13.4 bln. m3 per year subject to the resource base committed to the project. Consequently overall production will make up from 2.6 to 8.0 mln t LNG per year. Capital expenditures for the project execution will amount $4.5 – 12 bln US subject to selection of a technical concept of the LNG plant and overall production. p>

By results of the pre-investment studies, the project was recognized as technically feasible and commercially attractive through the options reviewed. It was noted too, the project has a potential to decrease capital expenditures and extra improvement of the financial and economic indexes at the expense of reduction of the pipeline route, oil logistic structures and a range of other factors. In compliance with marketing analysis of the target markets, “Pechora LNG” has possibilities to enter the international markets within a planning period. p>

Additionally third party’s expert opinion from “Gazprom VNIIGAZ” was presented to the attention of working group members. Summary proposed by Director “Center for gas processing and liquid hydrocarbons refining” Anatoly Mamayev confirms the results of the pre-investment studies performed by “Gyprospezgaz” JSC and its conformance to requirements of “Gazprom” JSC, intended for exploratory designs. p>

In accordance with findings of the meeting the decision has been made to send the files of pre-investment studies under “Pechora LNG” project to Department of Gas, Gas Condensate and Oil Production “Gazprom” JSC to prepare the appropriate summary. p>

For reference:

“Pechora LNG” project is based on reserves both of Kumzhinskoye and Korovinskoye GCF in NAO. State Reserves Committee reserves by АВС1+С2 category amount to 145 bln. m3 gas and 3.9 mln. t condensate. Under the project execution international reserve auditing has been performed, by 3D seismic data on Kumzhinskoye field the initial reserves growth amounted to 20 bln. m3 gas, a prospecting and appraisal well was drilled and daily flow rate was confirmed as 1.1 mln. m3 per day, feasibility study under different options of the disposition of LNG plant was completed in compliance with leading Russian and international engineering centers. p>

Working group for pre-investment studies under “Pechora LNG” project was founded in May of current year, by results of NAD Governor’s address Igor Fyedorov to Chairman of the board “Gazprom” JSC Alexei Miller with initiative to develop the complete plan to produce LNG on NAD territory. By working group’s decision “Gyprospezgaz” JSC was assigned as the executor of studies. It is a specialized design bureau of “Gazprom” JSC that has a sound participation experience in assessment and development of the multiple-purpose projects to produce LNG. Additionally by “Gazprom” JSC representatives’ guidelines it was decided to attract third party expert of the pre-investment studies represented by “Gazprom VNIIGAZ” LLC.