Germany’s Wintershall Dea expects to continue its reliance on Russian gas production and supplies for years to come despite its recent decision to allocate hundreds of millions of euros to research options in hydrogen production and carbon capture and storage.
Speaking on a conference call on Thursday, executive board member Thilo Weiland said the role of Russian gas exports to Europe will only increase as the continent is cutting back on coal use and transiting to green energy.
“Russia has good potential [to produce gas] that we should use”, he said.
Nord Stream 2 hope
Weiland reiterated the company’s strong support for the controversial Russian subsea gas pipeline project to Germany, Nord Stream 2, saying that it increases European energy security and competition among gas suppliers, as well as “answers European climate protection goals”.
Weiland said that the company hopes those European member states that oppose the project will change their stance after seeing the benefits from the pipeline project.
Together with four other European companies, Wintershall has provided a total of €730 million ($875 million) of project financing to Nord Stream 2 in anticipation that the loan will be converted into a minority shareholding in the project once it is operational.
Russian gas ventures
Wintershall will continue to invest into its three gas-producing ventures in Russia with state-controlled monopoly Gazprom, with focus on Achim Development and Severneftegazprom, according to Weiland.
Achim Development started production from Reservoir 4A in deep, tight Achimov layers on the Gazprom-operated Urengoy field in West Siberia earlier this year.
The venture is preparing to start production from its second target reservoir, 5A, before the end of this year.
Wintershall Dea is currently assessing results of testing gas flows from deep wells into the Turon formation at the South Russkoye field in West Siberia that is operated by its other venture with the Russian gas giant, Severneftegazprom, according to Weiland.
Severneftegazprom is producing gas from shallow Senoman formations at the field at the annual plateau rate of 25 billion cubic metres of gas.
“Preliminary results of Turon wells [at South Russkoye] are highly promising”, Weiland said, before auctioning that more time is required to research the potential of these deep formations before a final decision to go ahead with their development can be made.
On the third Wintershall’s venture with Gazprom, Achimgaz, Wieland said that the company is making efforts to maintain its annual production plateau of 10 Bcm of gas.
Wintershall is also continuing its consultations with Gazprom on options to convert some Russian gas to hydrogen on arrival to Germany, as well as transport hydrogen in a mixture with methane, he said.
At the end of the last year, Wintershall said that it will invest about €400 million in its own projects to reduce and offset greenhouse emissions with a goal to achieve net zero emissions from its operations by 2030.