Rospan and Kharampur are major gas assets viewed as the top drivers of the Company's near-term hydrocarbon production growth.
Rosneft’s strategic goal for gas business development is to consistently grow its shareholder value through increased gas output supported by a high-performance long-term sales portfolio.
The Company is developing vast gas reserves in Western and Eastern Siberia and holds a unique licence portfolio for hydrocarbon development on the Russian continental shelf. As at 1 January 2020, АВ1С1+В2С2 recoverable gas reserves were estimated at 8.7 tcm.
Rosneft produces gas through more than 35 subsidiaries and joint ventures in Western and Eastern Siberia, Central Russia, the south of European Russia, the Russian Far East, as well as in Egypt, and Vietnam.
Performance in the reporting year
In 2020, Rosneft’s gas production both in Russia and abroad totalled 62.83Recovered gas volume excluding flared gas and gas used in liquid hydrocarbon production. bcm, including 30.262 bcm of natural gas and 32.563 bcm of APG. The Company’s international projects, mostly in Egypt and Vietnam, accounted for 4.5 bcm of the total gas output, including 4.49 bcm of natural gas, while its domestic output stood at 58.32 bcm. Some of the Russian gas was processed into liquid hydrocarbons. In 2020, the Company’s gas output in Russia, including gas processed into liquid hydrocarbons, totalled 58.68 bcm.
Gas production decreased by 6.2%, or 4.13 bcm vs 2019. The decrease is primarily due to APG production going down as a result of oil production cuts under the new OPEC+ deal, a drop in gas demand amid the COVID-19 pandemic, and warm weather.
Gas production by region
Rosneft’s largest gas-producing region is Western Siberia, which contributed 70%, or 43.73 bcm, of the total gas output in 2020, including 21.86 bcm of natural gas produced mainly by Sibneftegaz, Rospan International, RN-Purneftegaz and Purgaz and 21.87 bcm of APG produced mainly by Samotlorneftegaz, RN-Yuganskneftegaz and RN-Purneftegaz.
In Eastern Siberia, gas was produced at the Vankor group of fields, the region's largest. In 2020, the output at these fields totalled 7.29 bcm, including 5.32 bcm of APG, and 1.97 bcm of natural gas.
In the Russian Far East, Rosneft mainly produced associated petroleum and natural gas from onshore fields and on the shelf off Sakhalin, with the bulk of the 3.22 bcm gas production in 2020 coming from the northern tip of the Chaivo field operated by RN-Shelf-Far East.
In the Volga-Urals region, gas was primarily produced from the fields owned by Orenburgneft, Samaraneftegaz, and Bashneft-Dobycha. Output there amounted to 2.06 bcm.
In Southern Russia, the Company's key gas asset is RN-Krasnodarneftegaz, which produces both natural and associated petroleum gas. The region brought in 1.82 bcm in 2020.
International projects, mainly the Zohr offshore field in Egypt, produced 4.5 bcm. Our operations in Vietnam also contributed.
17. Agaleevsky licenсe area
20.RN-Shelf-Far East, Sakhalin-1
22.Otradnensky and Neftegorsky GPPs in the Samara Region
23.Buzulukskoye GPP in the Orenburg Region
24.Shkapovskoye and Tuimazinskoye GPPs
This is the Company's largest gas asset and the top contributor to the Company's near-term production growth.
Rospan traces its history to 1994. In 2013 it joined Rosneft, which proved to be a major turning point contributing significantly to the project’s growth. Rospan owns exploration and development rights for the Urengoyskoye, Vostochno-Urengoyskoye, and Severo-Esetinskoye fields in the Novo-Urengoysky, Vostochno-Urengoysky, and Resursny licence areas. The key development asset is the Achimov deposits. The project’s complexity has to do with the low natural permeability of the deposits and abnormally high reservoir pressure. With successful long-term follow-up exploration programme, jointly prepared by the Company and the corporate R&D institute, the project will help develop up to 97% of the asset's reserves as opposed to the previously planned 83%.
The Achimov production complex lies at the depth of four kilometres and is characterised by abnormally high reservoir pressure of 600 atm or more, which ensures high gas condensate content and contributes to successful commercial application of technologies for separating a propane/butane fraction. The abnormally high reservoir pressure helps extend the primary recovery stage and delay the use of booster compressor stations . The asset is being developed with a widespread utilisation of hydraulic fracturing and cutting-edge HIWAY technique, including multi-stage hydraulic fracturing at horizontal wells. These technologies provide for the most comprehensive development of the low-permeability and hydrodynamically isolated reservoir, while also increasing well productivity. In 2020, the resource base of the deposits under the PRMS standards grew significantly (by up to 30%), as verified by DeGolyer & MacNaughton auditors. The year also saw the first assessment of the Jurassic formations’ resource potential. It was conducted using multivariate analysis of uncertainties and risks using the probabilistic approach. According to the assessment, the Jurassic formations’ resource potential may reach up to 84 mmtoe. The Company continues rolling out and improving the system to monitor well performance using multiphase stationary flow meter.
- A gas treatment unit at the Novo-Urengoysky licence area;
- a comprehensive gas and condensate treatment unit at the Vostochno-Urengoysky licence area consisting of four production lines;
- an oil treatment unit with a facility to store and transship gas condensate and oil;
- a railway terminal for loading industrial propane/butane mixture at the Korotchayevo station;
- trunk and oilfield pipelines;
- compressor stations and power supply facilities.
Also vital to Rosneft’s gas business is Kharampur Gas, a project we run together with BP to build field facilities and develop natural gas deposits at the Kharampurskoye field. Its objectives include conventional gas production from the Cenomanian deposit and the pilot and then full-scale development of the Turonian deposit. The Company has the expertise and experience to deliver such complex projects efficiently.
In 2020, construction of key gas-related facilities remained in an active phase:
- the work progressed as planned;
- the construction and installation at the gas treatment unit, which is key for the project, were over 40% complete: foundation concrete was cast, pile caps and metalwork of racks, buildings and structures were manufactured and installed, equipment, process pipelines, etc. were installed;
- the construction and installation of the gas shipment pipeline were well on track, the pipeline crossing over the road and railway was constructed by horizontal auger boring, crossings over the Vasseyakha, Shonyauyakha and Ayvasedapur rivers were completed using directional drilling, and the tie-in to Gazprom's trunk gas pipeline network was built;
- construction of gas gathering networks and fit-up of well pads and power facilities continued.
Also in 2020, as part of the project for the Turonian deposit full-scale development and field facilities construction:
- to enable pilot production in order to confirm reserves, study core samples, and update the geological model, the construction and installation were completed at two gas well clusters, downhole gauges were put into operation, and linear segments of gas gathering lines were tested;
- based on a 2019 feasibility study and the pilot production results, design and survey activities were initiated under the project.
Total recoverable AB1C1+B2C2 reserves as at 1 January 2021, including the Turonian deposit: were ca. 1 tcm of natural gas; 100 mmt of crude oil.
Research was also in progress at the Kharampurskoye field to study the geological structure and production potential of the Berezovskaya suite's low-permeability gas reservoirs. In 2020, we worked with other major subsoil users and the State Commission for Mineral Reserves to complete guidelines for studying and calculating free gas reserves in Coniacian–Campanian deposits (the Berezovskaya suite, etc.), pending approval at a 2021 meeting of the commission's Technology Expert Council.
To be completed in the near future:
- gas production infrastructure for the Cenomanian deposit;
- key facilities (the gas treatment unit, gas shipment pipeline, and field facilities);
- design and survey activities to enable the full-scale development of the Turonian deposit and field facilities construction, and expert reviews of the design documentation.
Gas production at the Cenomanian deposit is scheduled to start in 2022.
This is our biggest gas-producing asset for the moment.
- production drilling continued;
- essential production facilities under construction included:
- a gas and condensate treatment unit and related infrastructure for the development of the Beregovoye field’s lower horizons;
- a booster compressor station at the Beregovoye field.
The first multilateral gas well was drilled at the Beregovoye oil and gas condensate field, with two cased horizontal boreholes 1.1 km long in total. The use of multilateral wells in complex geological conditions will help us achieve much higher flow rates as compared with single-bore horizontal wells and reduce geological risks.
In 2021, we plan:
- to launch a gas and condensate treatment unit and related infrastructure;
- to launch a booster compressor station at the Beregovoye field;
- to continue building other gas and condensate treatment and transportation facilities.
In addition, we will continue to drill multilateral wells. Based on this experience, we will decide whether the practice should be adopted elsewhere.
Thanks to production maintenance projects at the existing fields and the non-capital-intensive development of the Beregovoye field’s lower horizons, annual gas output in the period until 2022 is expected to reach 13 bcm.
and oil and gas condensate reserves amounted to 31 mmt
In 2020, Rosneft continued to develop prospective gas production centres at its existing fields in Eastern Siberia and the Republic of Sakha (Yakutia).
Rosneft and Beijing Enterprises Group Company LimitedBeijing Enterprises Group Company Limited holds a 20% stake in Verkhnechonskneftegaz. were jointly exploring the Verkhnechonskoye oil and gas condensate field in the Irkutsk Region.
Our strategic partnership with Beijing Enterprises Group Company Limited is expected to open up new opportunities for monetising gas reserves in Eastern Russia.
In the Republic of Sakha, Rosneft, BP and an Indian consortium consisting of Oil India Limited, Indian Oil Corporation Limited and Bharat PetroResources Limited continued to develop the Srednebotuobinskoye oil and gas condensate field, which is set to become the place of a major gas production project.
In the long term, we plan to use the infrastructure of the Kynsko-Chaselsky licence area to create a new gas production centre in the south-east of the Yamal-Nenets Autonomous Area. We also expect to develop seven previously acquired licence areas and, in the longer run, the adjacent areas in the eastern part of what is open acreage today. The project’s expected annual output is 15.7 bcm, with a potential to grow to 19 bcm later.
In 2020, we completed the key field works related to engineering surveys, and started to develop design documentation for the project’s first phase, which targets an annual output of up to 8.7 bcm.
In 2021, Rosneft plans to receive survey reports and complete the design documentation.
To expand gas production in the Yamal-Nenets Autonomous Area, we also acquired the Zapadno-Minkhovsky subsurface site on the Gydan Peninsula (area of federal importance), including an area in the Taz Estuary of the Kara Sea, at an auction held in December 2020.
In 2020, the Company's APG utilisation rate, including fields under development and greenfield projects at early stages of development, stood at 74.8% – or 3 p.p. lower than a year ago. If fields at early stages of development are excluded, the rate was 94.3%.
The Company continued its full-scale efforts to improve utilisation and completed 21 APG facilities in the reporting period.
To further develop our gas processing capabilities, we worked on a project to build the Maisky gas processing complex. The design documentation was developed, and state expert review conclusions were obtained. A decision was made to initiate a procurement procedure for the facility construction services.
To monetise gas reserves off the coast of Sakhalin as part of the Sakhalin-1 consortium, the Company participates in the Far Eastern LNG project set to build an LNG plant with a capacity of 6.2 mmtpa near the De-Kastri port in the Khabarovsk Territory. In 2020, the project saw a FEED contractor selected following the tender, the FEED contract signed, LNG marketing campaign developed, and the onshore facilities of the offshore loading system dismantled as part of site preparations.
In 2021, we plan to complete FEED, start preparation of a tender to select an EPC contractor, and launch the LNG marketing campaign.
Tapping into gas markets abroad and becoming a global player in the world's LNG market are among Rosneft's priorities. The Company’s involvement in international gas projects will ensure a cost-effective increase in natural gas reserves and a balanced risk profile of its asset portfolio.