Gazprom has started production from a second major asset in eastern Siberia, as the Russian gas giant prepares to boost pipeline gas supplies to China next year, in accordance with long-term supply obligations.
The Kovykta field will deliver its gas to the Chayanda deposit via a 800-kilometre connector from where it will transit another 2000 kilometres through the Sila Sibiri pipeline to a major gas processing plant near the Russian-Chinese border prior to export to China.
Both assets will require the drilling of hundreds of additional wells and the construction of infield gas treatment and handling facilities to be capable of reaching their planned plateau output.
According to Gazprom deputy executive board chairman Oleg Aksyutin, about 400 development wells will be required to eventually bring the Kovykta asset to a production plateau of 27 billion cubic metres of gas per year. The asset is also expected to produce about 31,000 barrels per day of condensate.
Completion of the first phase of the Kovykta development will only permit annual production of 6 Bcm, he said.
The field has estimated recoverable reserves of about 1.8 trillion cubic metres and Gazprom is understood to be continuing exploration efforts around Kovykta in search of new gas discoveries.
In 2023, Gazprom plans to also drill another 65 wells at the Chayanda field, which entered production at the end of 2019 and has a targeted production plateau of 25 Bcm per annum of gas.
In 2014, Gazprom contracted to deliver up to 38 Bcm of gas per annum to China via Sila Sibiri, and is looking to increase the supply of gas via this pipeline above the contracted level.
This year, Gazprom is expected to send just over 15 Bcm of gas via the pipeline, from 10.4 Bcm in 2021, according to a Russian energy industry executive.
The increase in supply is dependent upon the drilling of development wells and the start-up of the large gas processing plant in the Amur region near the border with China.
The Amur plant is now anticipated to become fully operational only in 2025, and will provide the processing capacity to treat up to 42 Bcm of gas per year, according to Gazprom.
Addressing a Kovykta start-up ceremony, Gazprom executives said the facilities will be commissioned on schedule, despite the impact of Western sanctions.
Earlier this week, Gazprom's board of directors said in a statement that the company expects global gas demand to continue growing in 2023.
It added that in the mid-term, Gazprom expects gas consumption in China to exceed the demand of all European countries taken together.
Besides Sila Sibiri, the Russian gas giant hopes to be able to build a major gas export pipeline from West Siberia to China across Mongolia, aiming to supply up to 50 Bcm of gas per year.
A third pipeline from Sakhalin Island to the northeastern regions of the country has been set at 10 Bcm per annum.
Gazprom in the second half of this year reduced its pipeline gas exports to Europe to about one third of usual volumes.
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