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Chayanda or Kovykta: Gazprom Selects Upstream Priorities in the East

This is an abridged version. The full text is avaiable to subscribers to The Russian Energy weekly.

The development of the Chayanda field, the core asset of the Yakutian gas production cluster and the main source of gas for a planned pipeline to Vladivostok, may miss the deadline. Some experts in Gazprom insist that Kovykta in the Irkutsk Region must be brought on stream first.

Delayed Decisions

The pre-feasibility study (the Russia term is ‘investment justification’) for the development of the Chayandinskoye oil-gas-and-condensate field and gas transportation from Yakutia is being delayed. Gazprom wanted to complete the job by June 2011; then moved the deadline to March 2012; and now it seems that it might not be the last postponement.

RusEnergy has learned that Gazprom contracted VNIPIgazdobycha R&D institute last year to perform an additional pre-feasibility research, which would be needed to make the final investment decision on Chayanda. The idea is to determine the optimal schedule for commissioning the Kovykta field and building a pipeline from it—with a possible link to the Yakutian gas production cluster. The research is to be finished in the first half of 2012, and Gazprom will again have to delay the pre-feasibility study for Chayanda. The choice of the field to be developed first is not going to be very simple.

Using Kovykta for boosting gas supply from Yakutia is not a new concept. Alexander Mandel, who heads Gazprom Dobycha Shelf, the company charged with preparing Chayanda for development, told journalists in March 2011” ‘Kovykta has been bought to export gas to Asian Pacific nations and help Chayanda and Sakhalin.’

According to Gazprom sources, the company’s Strategic Planning Department advocated the development of Kovykta before Chayanda because the economics of the Irkutsk venture appeared more attractive than the Yakutian project. Alexei Miller, however, declared in December that Chayanda was the priority (and the dissenting department was demolished). Mandel’s company is no longer in charge of Chayanda either. The Yakutian gas production cluster is controlled now by Gazprom Dobycha Noyabrsk.

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