Russian independent Novatek has stepped up exploration activities on the Gydan Peninsula in West Siberia's Yamal-Nenets region as it works towards development of its second liquefied natural gas project in the area, Arctic LNG 2, and declares its intention to become a global LNG supplier, writes Vladimir Afanasiev.

Exploration activities are getting under way north, south and east of the Utrenny block, also known as Salmanovsky, according to recent tender notices posted by the company and its subsidiaries.

A major 3D seismic effort covering more than 5600 square kilometres is planned for the Shtormovoy block in the north of the peninsula, according to the company.

Novatek wants to gather about 1100 square kilometres of 3D seismic data at two onshore locations along opposing shorelines of Ob Bay and Gydan Bay before the end of 2021.

As well as finding new prospects, the aim is to pinpoint the borders of potential hydrocarbon reservoirs identified earlier, including a gas and condensate structure discovered in 1993 that hosts estimated recoverable reserves of 480 billion cubic metres.

Novatek gained the Shtormovoy licence in 2017 for a fee of over 1 billion roubles ($15.6 million), together with licences for two other blocks on the neighbouring Yamal Peninsula, where it operates its first LNG project, Yamal LNG.

Meanwhile, wholly owned Novatek subsidiary Yukharovneftegaz plans to gather about 2200 kilometres of 2D seismic on the South Leskinsky block on the eastern part of the Gydan Peninsula during the summers of 2019 and 2020.

Novatek won a 27-year exploration and development licence for South Leskinsky just last November, with the acreage covering 5600 square kilometres over a major portion of land in the east of the peninsula.

No drilling has yet taken place on the acreage, which is believed to hold potential hydrocarbon resources based solely on similar geological patterns at neighbouring blocks.

Another Novatek subsidiary, Arctic LNG 1, plans to restart exploration at the onshore Gydansky block. Gydansky exploration was halted during the Soviet era because the area was regarded as too remote for commercial development.

The block lies in the centre of the Gydan Peninsula and is only accessible via temporary roads during the winter season.

These link the acreage with a berth on Ob Bay that was built to offload cargoes for the future Arctic LNG 2 project.

In January, Arctic LNG 1 finished the re-completion of an old Soviet exploration well — number 132 — that was drilled to a depth of 3600 metres.

In a recent tender disclosure, the subsidiary said it is now working on a second well, number 136.

In the next phase, the operator intends to carry out fracking at these two wells, with the job to be completed by the summer of 2020.

Several other old exploration wells are set to be re-entered on the block, according to Arctic LNG 1.

Novatek said earlier that it estimates Gydansky's possible in-place resources at more than 4.7 billion barrels of oil equivalent, which is more than sufficient to support the company’s plans to build at least two more LNG plants in Yamal-Nenets.

Finally, Novatek has pencilled in plans to drill an exploration well this summer and autumn at the Geofizichesky block to help understand whether a discovered onshore reservoir extends into its western offshore flank.

Another exploration well has been planned for some time at the neighbouring Trekhbugorny block, according to reports in Moscow.

Despite already confirming recoverable gas reserves of about 2 trillion cubic metres at the Utrenny block, Novatek is also planning another survey to gather about 900 square kilometres of 3D seismic data at the block's northern and southern flanks.

Novatek’s current plan calls for the construction of three liquefaction trains on concrete gravity-based foundations for Arctic LNG 2, with a total capacity of about 20 million tonnes per annum.

However, it also left an option to add fourth and fifth trains if gas reserves rise at the Utrenny block and nearby acreage.

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