Russ Oil-Gas

19 April 2007 - Upstream OnLine - Russian gas giant Gazprom has finally turned on the taps at the giant Beregovoye field, four years after the field, which holds the equivalent of Brazil's gas reserves, was scheduled to come on stream. 'The key to bringing Beregovoye on stream was its ownership. Until June last year, it was controlled by private Russian gas player Itera, which said Beregovoye had been ready to produce gas since May 2003 but Gazprom refused to link it to its pipelines. Last year Gazprom's banking arm paid Itera $130 million for 51% of Beregovoye's operating company, Sibneftegaz, resolving the dispute that had kept its gas locked up and off the market, a Reuters report said. The takeover by Gazprom, at a price that analysts said was little more than 10% of the stake's value, neutralised one of its last competitors and further strengthened the Kremlin's grip over the industry. Itera still has 28% of Sibneftegaz, while fertiliser company Acron , which opposed the gas players' plans for the field, has the remaining 21%. Gazprom said today that Beregovoye could produce up to 14 billion cubic metres of gas per year, above previous estimates of between 11 Bcm and 12 Bcm. Beregovoye lies in the Pur region near to Gazprom's existing production base and has reserves of 319.2 Bcm, making it one of Russia's largest gas fields. It also contains 4.9 million tonnes of gas condensate and 7.5 million tonnes of oil. Sibneftegaz chief executive Andrei Burbasov told a news conference that the company planned to produce 5 Bcm at the field this year and around 8 Bcm next year. Reuters quoted him as saying it might reach maximum output by 2009, provided it managed to produce between 2 Bcm and 2.5 Bcm from its lower deposits, a plan that is still being worked on. Investment in the field has already topped $450 million and another $50 million to 60 million will be needed to get up to full production, he said. The head of Gazprom's management at the field, Grigory Kucheryavenko, said the gas flow from Beregovoye to the pipeline network could also fall if Gazprom raised output from its nearby Zapolyarnoye field from 100 Bcm to the maximum of 130 Bcm. Gazprom is trying to expand the pipeline's capacity to cope with the added call on its network and would like to see other producers investing in its expansion.