Gazprom eyes remote new gas well as Russia steps up LNG push

A Gazprom subsidiary plans to drill an exploration well on Russia’s remote Yamal Peninsula in the second half of this year, with any potential development targeting feedstock for liquefied natural gas exports to China and elsewhere.

Russian authorities are encouraging Gazprom and other operators to switch their investment strategies to LNG developments after Russian pipeline gas supplies to Europe dropped by more than 70% over the past year.

Russia became China’s top gas supplier in January, according to Moscow news agency Interfax, quoting data from Chinese customs officials.

China imported around 2.7 billion cubic metres of gas from Russia in January, overtaking gas deliveries from Turkmenistan, Qatar and Australia.

It is not clear which LNG project will be targeted for volumes from the Seyakhinsky block, with the well site located hundreds of kilometres from the country’s gas trunkline network.

However, it is also located 25 kilometres from the shore of Ob Bay and about 77 kilometres south of the port of Sabetta, which serves the Yamal LNG project operated by Russia’s largest gas independent, Novatek.

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Yamal LNG is Russia’s largest LNG development, reporting output of 21 million tonnes of LNG in 2022, almost double the 11 million tonnes produced by the Sakhalin 2 LNG project in the country’s far east, in which Gazprom holds 50% interest.

Gazprom subsidiary Gazpromdobycha Urengoy is expected to use the port of Sabetta to deliver equipment and supplies to the Seyakhinsky block well site, due to the lack of permanent road links to the location.

The Seyakhinsky block lies east of the Upper Tiuteyskoye and West Seyakhinskoye fields that Novatek plans to develop for its next Yamal Peninsula LNG project, Obsky LNG.

The South Tambeyskoye field, which provides feedstock for the Yamal LNG scheme, is located north of the Seyakhinsky block and holds estimated proven recoverable reserves of about 1.3 billion cubic metres of gas.

Gazpromdobycha Urengoy said in a regulatory announcement that the exploration well will be drilled to a maximum depth of 4000 metres.

The well site’s remote location will require extensive mobilisation of supplies, personnel and equipment — including a Romania-manufactured heavy drilling rig understood to be operated by a local Gazprom-affiliated drilling contractor — as well as construction of a temporary helipad for emergency evacuation, a fuel depot, temporary housing, warehouses and other supporting facilities, the company said.

Gazprom has controlled the Seyakhinsky block since 2007 but only invested in the collection of around 1000 kilometres of 2D seismic before passing the licence to Gazpromdobycha Urengoy in 2016, according to Russian geological portal NedraExpert.

Gazprom earlier estimated possible in-place hydrocarbon resources at more than 3 billion barrels of oil equivalent.