Russ Oil-Gas

5 December 2008 - Russia Today - Gazprom has begun development of its new mega project Yamal in Western Siberia. Yamal Peninsula - dozens of oil and gas fields. Holding reserves counted in the Trillions of cubic metres. Yamal's huge stocks of hydrocarbons will start supplying energy to Russia and abroad in only 20 years' time. This week the company drilled its first well at Bovanenkovo gas field and began building its first trunk pipeline. In two years this pipeline will let gas from Yamal’s largest gas deposit get safely into Russia’s gas transportation system. The project is one of the most important for Gazprom, so it hasn’t fallen victim to investment cuts back. Gazprom CEO Alexei Miller says building it will take one quarter of next year's $33 Billion investment budget. "The volume of our investment in the Yamal projects is increasing. Within next two years it will amount to almost 1/3 of our total investments.” Analysts say it's a long term project - and Yamal will pay back. However, from Ivan Mazalov, from Prosperity Capital Management says the company could have been more efficient in using existing gas supplies. “If we are talking about big volumes, big potential volumes, its an important piece of Gazprom’s strategy. Other than that you can always, and also rely on imports of Central Asian gas, which is growing. Also Non Gazprom gas which can be produced in Russia and put into the system, which has been largely wasted up to now.” Waste a lot of non-gazprom gas, can rely on asian reserves, Gazprom is building the Yamal project alone. But it may ask foreign firms for help if it decides to liquify the gas for export.