Russian privately held oil producer Lukoil and state-controlled gas monopoly Gazprom have moved forward in their long-discussed plan to create a joint venture to develop two oil and gas fields in the Nenets region in the north of the country.

According to a Gazprom statement, both companies have agreed terms of their involvement in the joint venture that was announced in June 2018 under a project to commercialise reserves of the Vaneyvisskoye and Layavozhskoye fields.

The two fields were discovered in early 1970s. Their combined recoverable reserves are estimated at about 225 billion cubic metres of gas and 75 million barrels of oil and condensate following interpretation of the exploration drilling results.

The joint venture will initially engage in the research and design of planned production facilities and infrastructure, as well as determine potential contractors and suppliers, to be capable of enabling shareholders to pass an investment decision on the project.

Under the plan, gas from the two fields will be pumped via a connector into a nearby gas trunkline, operated by Gazprom.

Meanwhile, oil and condensate are set to be shipped to a Lukoil-owned marine export terminal in Varandey to avoid building a lengthy and expensive connection to the country’s oil trunk pipelines network.

In 2017, Gazprom paid 23.3 billion rubles (US$311 million) in an auction for the licences for the Vaneyvisskoye and Layavozhskoye fields, beating the country’s largest oil producer Rosneft, with Gazprom’s final bid being almost three times the opening price.

Lukoil has a long history of building ties to Gazprom.

It already sells gas at its remote fields in the Yamal-Nenets region in West Siberia directly to the gas giant instead of trying to deliver it to end-customers elsewhere in Russia, and has agreed pipeline access terms with Gazprom to do that.

Earlier on Tuesday, Gazprom also revealed that it remains in talks with country’s largest independent gas producer, Novatek, to form a joint venture to explore and develop the North Vrangelevsky block in the Chukotka Sea in the Russian Arctic region.

This large deep-water and barely explored block is operated by Gazprom’s oil subsidiary Gazprom Neft.

Authorities in 2013 awarded a licence for the acreage to Gazprom in anticipation that the gas giant would proceed with the project in partnership with UK major Shell.

However, US and European sanctions introduced the following year against Russia and its offshore developments put the brakes on those hopes.

Speaking on a conference call in Moscow, head of Gazprom Neft’s offshore subsidiary, Igor Rustamov, did not specify any next steps for the potential partnership with Novatek that was first revealed in 2019.

Novatek operates a fleet of specialised Arctic class LNG carriers that service its Yamal LNG development in the Yamal-Nenets region and Arctic LNG 2 project, due to come into operation in 2023.

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