A recently created subsidiary of Russia's largest independent gas producer Novatek, Obsky Gas Chemistry Complex (OGCC), has launched its first tenders in a bid to increase gas reserves under its control, according to recent tender disclosure notices.
The subsidiary is looking for drilling contractors to spud two exploration wells in the north-eastern part of the West Seyakhinskoye field between July 2022 and April 2023.
The aim of the wildcats is to test the potential production ability of gas-bearing reservoirs and several condensate layers at a depth up to 2400 metres.
The licence area is located more than 200 kilometres south of the port of Sabetta on the Yamal Peninsula in the gas-rich Yamal-Nenets region in West Siberia, and is accessible only via temporary winter roads.
OGCC is a reincarnation of an earlier Novatek plan to build a second liquefied natural gas plant near its flagship Yamal LNG project in Sabetta.
Known as Obsky LNG, the subsidiary was set to develop the West Seyakhinskoye and Upper Tiuteyskoye gas condensate fields with estimated total proven and probable reserves of 264 billion cubic metres of gas, and to produce more than 5 million tonnes of LNG for international markets.
OGCC’s decision to run the drilling tenders comes despite Novatek still lacking a firm view on the options to commercialise the two fields' gas reserves by producing blue ammonia, hydrogen and other clean-burning fuels, such as methanol.
Novatek in July said that a pre-front-end engineering and design study to understand the potential design, capacity and location options of OGCC is to be submitted to the company before the end of this year.
On a recent conference call, Novatek deputy chairman of the management board Mark Gyetvay said the study should provides answers to such issues, including the size of the OGCC facilities, whether they will be based offshore on concrete gravity-based foundations or onshore, and whether the complex will still produce some LNG.
According to industry analysts in Moscow, OGCC’s drilling tender announcements underline the company’s confidence that it has to embark on a route towards catching up with the unfolding global transition to non-carbon based sources of energy.
Earlier this week, Russian Prime Minister Mikhail Mishustin ordered ministries and state-run corporations to create several working groups to propose steps and measures that the country should take to foster the adoption of renewable and carbonless sources of energy in the domestic economy.
Russian presidential envoy Anatoly Chubais warned in a letter, made available to local media in Moscow, that the global energy transition could deal a major blow to the country’s economy and its carbon-fuels sector. However, it may also open a raft of opportunities for its companies.
Meanwhile, leading Russian economist Sergey Guriev told the Echo Moskvy radio station that any governmental recommendations will remain on paper unless businesses and corporations in the country see the sense and the need for change.
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