RUSSIA: Russia's giant gas producer Gazprom launches a huge Arctic field to supply Europe, where demand is falling

Record ID: 574130

  • Title: RUSSIA: Russia's giant gas producer Gazprom launches a huge Arctic field to supply Europe, where demand is falling
  • Date: 24th October 2012
  • Summary: BOVANENKOVO GAS FIELD, RUSSIA (OCTOBER 23, 2012) (REUTERS) VARIOUS OF GAZPROM INSTALLATIONS AT GAS FIELD
  • Embargoed: 8th November 2012 12:00
  • Keywords:
  • Location: Russian Federation
  • Country: Russia
  • Topics: Business,Energy
  • Reuters ID: LVA3FK30LYGXC51ENXAYCMQECYC2
  • Story Text: President Vladimir Putin ordered a rethink of Russia's natural gas export policy to take advantage of rising Asian demand, as giant producer Gazprom launched a huge Arctic field to supply Europe, where demand is falling.
    Putin has tightened his personal grip on Russia's gas export policy since the formal launch of a European Commission probe into pipeline gas export monopoly Gazprom's pricing under its standard long-term contracts, which are linked to the oil price.
    In the past year, he has been urging Gazprom to update its strategy and develop capacity to produce liquefied natural gas (LNG) that can be exported by sea.

    "This is almost the whole amount of export to Europe, a bit less, but almost the whole volume. It is a huge amount, this work is comparable to projects carried out in the Soviet Union when it launched large-scale gas extraction," Putin said as he presided by video link over the launch of Gazprom's giant Bovanenkovo field on the Arctic Yamal Peninsula, which will pump as much as 115 billion cubic metres of gas by pipelines, mainly to Europe, in 2017 with a view of increasing it to 140 bcm thereafter. It will produce 46 bcm in 2013.
    Russia, the world's second-largest producer of natural gas after the United States, has for years unsuccessfully tried to secure a deal to sell pipeline gas to China, the world's largest energy consumer. The two countries have failed so far to iron out differences over issues such as price and routes.
    Russia is now aiming to sell LNG to China, Korea and India.
    Hydrocarbon production accounts for half of state revenues, and as part of his close supervision of energy policy, Putin has warned Gazprom - which long rejected suggestions that a boom in U.S. shale production would have lasting consequences - to adapt its approach.
    The much-delayed Bovanenkovo field contains almost 5 trillion cubic metres of gas - enough to satisfy global gas demand for a year - marking Gazprom's first big foray onto the Yamal peninsula, north of its traditional Siberian base.
    Yamal is hundreds of kilometres north of Gazprom's core assets in the Nadym-Pur-Taz basin and the company needs tens of billions of dollars to bring gas from remote deposits into its trunk gas pipeline system. Bovanenkovo is Yamal's largest gas field.
  • Copyright Holder: REUTERS
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