3.8. Gas Business


Gas Business strategic goals:

  • development and efficient monetization of resources with a production increase potential up to 100 bcm by 2020;
  • increase in gas production in the east of Russia in case of gas export liberalization;
  • improvement of APG and associated liquid fraction monetization by expanding gas value in the chain, gas refining development, and further NGL and LHG refining to sell high added value products;
  • improvement of gas sales efficiency in the Russian Federation;
  • improvement of regulation in the gas industry;
  • development of LNG production and access to the global LNG market; creation of a basis and accumulation of necessary competencies for LNG Arctic projects delivery;
  • implementation of advanced technologies using global gas upstream and downstream expertise.

Gas Business achievements:

  • Rosneft and an Alltech Group company finalized the creation of a a joint venture (JV) in late 2015 to develop gas production and monetization projects in the Nenets Autonomous District. The JV received subsoil licenses for the Kumzhinskoye and Korovinskoye fields. The JV also received the funds to be allocated for incorporated project development. Rosneft earned a majority share in the JV. The JV will form a foundation for the set-up of a new gas production center in Nenets Autonomous District involving construction of LNG plant and relevant infrastructure. This project is a key element of Rosneft’s gas strategy.
  • The second stage of Novo-Urengoi gas and gas condensate processing plant was started up in Q4 2015 by Rospan International, being the driver of gas production growth for years to come.
  • Long-term gas supply contracts were signed with E.ON Russia for five years with a total supply volume of 4.4 bcm and with Evraz Group for ten years with a total supply volume of 14 bcm of gas.
  • Three licenses were purchased for the Yutermalsky, Malokhadyryakhinsky and Tochipylkynsky license areas with С1+С2 gas reserves totaling 4.15 bcm and oil/condensate reserves amounting to 0.67 mmt. Resources of these areas make 170 btoe.
  • In the end of October, Rosneft and ExxonMobil Consortium were recognized a winning bidder for three offshore areas in the Republic of Mozambique after the fifth license round held by INP (Instituto Nacional de Petróleo, National Oil Institute). The long-term perspectives of exploration and a potential of large gas fields discovery were confirmed by the geological analysis of both companies.
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Gas production amounts to 20 % of the Company’s total hydrocarbon production. Gas potential development is one of the Company’s strategic objectives and it has recently taken some important steps forward in this area. Rosneft has substantial gas reserves at the initial development stage which supports a high growth potential and steady production expansion. A farther growth is planned in value-added use of associated petroleum gas.

Rosneft produces gas via more than 30 subsidiaries and joint ventures in West and East Siberia, Central Russia, in the south of the European part of Russia, Russian Far East, as well as Vietnam, Venezuela and Canada.

The Company develops significant gas reserves in West and East Siberia and has a unique license portfolio for the development of hydrocarbon resources on the Russian continental shelf. Rosneft’s strategic goal in gas business development IS A long-term increase of the Company’s shareholder value through increased gas production secured by a highly efficient long-term sales portfolio.

The Company’s gas production in Russia in 2015 totaled 62.54 bcm1 with a
10 % organic growth year-on-year.

Recoverable АВС1+С2 gas reserves as at January 01, 2016 reached 7.5 tcm, being 4 % above the previous year. The greatest absolute and percentage growth of gas reserves according to the Russian classification was supported by exploration drilling by PJSC Sibneftegaz, one of the major production companies, and by a joint venture with an Altec Group company using the assets of the Kumzhinskoye and Korovinskoye fields.

Rosneft will continue to expand gas production, improve sales performance and prepare for the launch of its major projects in 2016 to provide for achievement of the set strategic goals.


62.54 BCM


87.9 %

APG utilization rate IN 2015

The Company’s total gas production in 2015 was record high 62.541 bcm, including 29.67 bcm of natural gas and 32.87 bcm of associated petroleum gas, with 0.85 bcm of the total gas production (0.64 bcm of natural gas) produced abroad in Vietnam, Venezuela, and Canada, and 61.69 bcm was produced in Russia. Besides a part of gas, produced in Russia, is sent for NGL production. The scope of the Company’s gas production in Russia in 2015, including gas sent for NGL production, amounted to 62.1 bcm.

Based on the 2015 results, Rosneft is rated among the top three gas producers in Russia with its production volume accounting for 9.8% of the total gas production in Russia.

The organic growth of gas productionwas 5.81 bcm, or 10%, year-on-year and driven by the following factors:

  • growth of Vankorneft production by 3.39 bcm resulting from natural and associated petroleum gas production increase and improvement of added value use of APG to 88 % after the start-up in Q2 2014 of the gas processing plant, compression station, and gas pipeline to transport gas to Gazprom’s UGSS for future sale;
  • 0.86 bcm increase in natural gas production by Sibneftegaz, mainly driven by the start of gas production in the Khadyryakhinsky license area in December 2014;
  • 0.76 bcm increase in gas production by RN-Purneftegaz LLC as a result of the start-up of new cluster pads in the Tarasovskoye field and gas pre-hydration and gas-gathering pipeline in Barsukovskoye field;
  • 0.67 bcm increase in APG production after the start of the pilot development of the Northern tip in Chaivo field on Sakhalin;
  • 0.26 bcm increase in natural gas production by JSC Rospan International as a result of the start-up of new wells and check-out of the 2nd stage of Novo-Urengoi gas and gas condensate processing plant.

The Company aims at long-term gas business development. Sustainable mid-term growth of oil and gas production by the Company is supported by the start-up of new fields with a stably increasing investment scope. It is primarily a large-scale development of Rospan International fields that provides for a gas production increase to almost 20 bcm and hydrocarbon liquids of about 6 mmt after its ramp-up. The first project stage is planned to be started in the Kharampur and Kynsko-Chaselskoye license areas. There are also plans to increase production in Sibneftegaz fields currently yielding 11.8 bcm to 14 bcm by 2020 driven by the development of the Khadyryakhinskoye field and bottom horizons in the Beregovoye field.

Major gas projects will support the fulfillment of the Company’s current contract commitments related to gas supply and are delivered to achieve the goals outlined in the Company’s Long-term Development Program.

West Siberia is the largest gas producing region for Rosneft. Gas production in the region grew by 5 % in 2015 to 44.49 bcm with natural gas production amounting to 24.45 bcm, being mainly from Sibneftegaz, Rospan International, and RN-Purneftegaz fields. Associated petroleum gas production in the region was 20.04 bcm with the main volume from Samotlorneftegaz, RN-Yuganskneftegaz, RN-Purneftegaz, Varyeganneftegaz, RN-Nyaganneftegaz, and Tomskneft fields.

RN-Purneftegaz LLC facility

Gas in East Siberia was produced in Vankorneft fields, being the largest fields in the region, as well as Verkhnechonskneftegaz and Taas-Yuriakh Neftegazodobycha. APG and natural gas production in 2015 amounted to 7.95 bcm and 0.98 bcm, respectively. The total production growth in the region of 3.43 bcm in 2015 is significantly above the last year’s figure, which is mostly driven by APG utilization rate increase.

Most gas in Central Russia in 2015 was produced in Orenburgneft and Samaraneftegaz fields.

RN-Krasnodarneftegaz LLC facility

RN-Krasnodarneftegaz LLC is the main gas producing asset in the south of Russia, leader of natural and associated petroleum gas production.

The main production source of the Russian Far East is APG from Nothern Chaivo field, APG produced by Sakhalin-1, and natural gas produced by RN-Sakhalinmorneftegaz LLC.

Gas was produced abroad under international projects in Vietnam, Venezuela, and Canada.

1. Rospan
Main growth center for natural gas production in the next five years. Production of 4.24 bcm
in 2015, growth potential to almost 20 bcm per year.

2015 — launch of the second stage of Novo-Urengoi gas and gas condensate processing plant in the check-out mode.

2. Sibneftegaz
Production of 11.76 bcm in 2015. 2015 — increase in gas production in the Khadyryakhinskoye field.

3. Vankor cluster
Production of 8.71 bcm in 2015. Development of a new production region.

2015 — continued increase of APG utilization rate. Achievement of the designed gas supply volume to gas transport network (GTN) 5.6 bcm per year.

4. Purneftegaz
Production of 5.53 bcm in 2015.

2015 — start-up of new cluster pads in the Tarasovskoye field and gas pre-hydration and gas-gathering pipeline in Barsukovskoye field.

5. Krasnodarneftegaz
Production of 2.75 bcm in 2015.

The main gas production asset in the south of Russia, leader of natural and associated petroleum gas production. In 2015 the total amount of gas production from the date of commercial operations beginning reached 100 bcm.

6. Orenburgneft
Production of 2.79 bcm in 2015.

Gas refining at Zaikinsky, Pokrovsky and Zagorsky refineries.

7. RN-Nyaganneftegaz
Production of 1.54 bcm in 2015. 2015 — sustain APG utilization rate above 96%.

8. sustain APG utilization rate above 96%.
Production of 3.1 bcm in 2015.

Has free gas and gascap gas reserves.

9. Samotlorneftegaz
Production of 5.82 bcm in 2015.

2015 — sustain APG utilization rate above 97%.

10. Yuganskneftegaz
Production of 4.58 bcm in 2015.

2015 — continued implementation of the APG utilization rate increase program.

11. Otradnensky and Neftegorsky GPP in the Samara Region and Zagorskaya integrated oil and gas treatment unit in the Orenburg Region
Center for the production of added value products

12. Pechora LNG
Promising project: JV with Alltech Group. The goal is the creation of a new gas production center in Nenets Autonomous District involving construction of LNG plant and relevant infrastructure.

13. Far East LNG (part of Sakhalin-1 project)
Alternative monetization option of natural gas reserves and resources under Sakhalin-1 and gas from Rosneft’s own offshore projects on Sakhalin.

Engineering and survey costs in December 2015 were included in the 2016 Work Program and Budget under Sakhalin-1 and approved by Sakhalin-1 competent government authority.

14. Kharampur

15. Kynsko-Chaselskoe

16. Minkhovskoye
Long-term gas production in West Siberia.

17. Bratskecogas
Gas supplies to the Irkutsk Region.

18. Urubcheno-Tokhomskaye group of fields

19. Verkhnechonskneftegaz

20. Taas-Yuriakh neftegazodobycha

21. North Veninskoye
Long-term gas production projects in East Siberia and in the Russian Far East.

22. RN-Sakhalinmorneftegaz, North Chaivo
Gas supplies to the Sakhalin Region and Khabarovsk Territory.


One of Rosneft’s priorities is to launch into the international gas markets to become a global LNG market player. The Company’s participation in gas production projects abroad will be instrumental in efficient increase in natural gas reserves and creation of a balanced asset portfolio for its sales markets.

The Company determined its target strategic regions, which are South America, Middle East, East Africa, and APR to compete against other global players and have efficient gas sales channels.

Rosneft is currently the operator of an offshore gas production project in Vietnam and is one of the major gas producers in the country.

Achievements in international gas business development in 2015

Rosneft and its partner ExxonMobil were awarded three offshore areas for hydraulic fracturing
(A5-B in the Angoche area and Z5-C and Z5-D in the Zambezi River basin) after the fifth license round in the Republic of Mozambique. Once the gas potential in these areas is confirmed, the Company will be able to implement a large-capacity LNG project in the future.

In June 2015, Rosneft signed a Joint Project Memorandum with PDVSA outlining a series of essential conditions for a joint venture required to implement an offshore gas project in Venezuela.

The Memorandum of Understanding and Roadmap with Petrobras, a state-owned company, signed in 2014 witnessed by Russian and Brazilian Presidents at the BRICS summit continues the efforts aimed at the approval of the best pattern and business model for joint monetization of natural gas reserves of two companies in the Solimões River basin.

CJSC Rospan International