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Rospan May Invest $5 bln into Yamalo-Nenets

Source: 10/20/2009, Location: Asia

The closed joint-stock company Rospan International, a subsidiary of TNK-BP producing gas in two areas in the Yamalo-Nenets Autonomous District, may invest $5 billion into the region for increasing its gas production up to 15 billion cubic meters a year, Dmitry Orlov, General Director of Rospan International, said to the press on Monday. Currently, the capital investments of TNK-BP into the Rospan project vary in the range $60–120 million a year and run up to $100 million this year.

The producing potential of Rospan is approximately 15 billion cubic meters of gas a year. Actual production of gas hinges upon agreements with Gazprom for access to the Unified Gas Supply System of Russia.

“Investments will be substantial if we reach such agreements. The total sum runs up to $5 billion. These investments will be stretched over several years,” said Mr. Orlov and explained that investments will be made in several stages and take some five years.

In response to a question on the progress of negotiations with Gazprom for tying into the Unified Gas Supply System, Mr. Orlov noted that “there are some positive tendencies.”

In early September 2009, TNK-BP reported about reception of technical documentation for Rospan from Gazprom for construction of a tie-in to the trunk gas pipeline. To construct a gas pipeline from the field to the tie-in point, the company will also need technical specifications for crossing the infrastructure of third parties.

Rospan is planning to produce 2.3 billion cubic meter of gas this year and maintain the same level of gas production next year, said the General Director. Currently, the gas produced by Rospan is sold through a joint venture of the company with Mezhregiongaz, a 100% subsidiary of Gazprom.

According to Mr. Orlov, Rospan is satisfied with its cooperation with Mezhregiongaz and may somewhat increase its annual gas production in the framework of this cooperation this or next year even without access to the Unified Gas Supply System.

Rospan International is exploring and developing the Vostochno-Urengoisky and Novo-Urengoisky license areas in the Yamalo-Nenets Autonomous District. The processing capacity of the company amounts to 3.2 billion cubic meters of natural gas and 870,000 tons of gas condensate a year. In December 2004, the Rospan International’s reserves of category C1+C2 were estimated at 901 billion cubic meters of gas and 51.51 million tons of oil.

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