Kovykta Project Development Presentation to James A. Baker III Institute & the Carnegie Endowment for International Peace Presented by Harry Griffith Deputy General Director, OJSC RUSIA Petroleum Moscow, Russia September 30, 2005
Jan 14, 2015
Kovykta Project Development
Presentation to James A. Baker III Institute & the Carnegie Endowment for International Peace
Presented by Harry Griffith
Deputy General Director,
OJSC RUSIA Petroleum
Moscow, Russia
September 30, 2005
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Agenda
•Field Project
•Transportation
•Markets
•Conclusions
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The Relative Size of the Project
EASTERN SIBERIA STATE OF TEXAS
FIELD OF KOVYKTA
100 km
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The Kovykta Field
Field • Extremely continental climate, average annual temperature below zero, sporadic permafrost;• Elevation: Ranging from 380 m to 1503 m above mean sea level.• 80 km to the nearest settlement, 350 km to Irkutsk city, 180 km to the station at Baikal-Amur Railroad;• License area: 10.3 thousand km2;
Reserves• Reserves associated with Precambrian Parfenovsky;• Average effective thickness: 14-15 m.• Occurrence at 2650 – 3300 subsurface• Gas reserves:
1.9 tcm gas84 mmt condensate
• Average flow-rate per well: 350 to 500 103m3/day;
History 1987 – Discovery by the state enterprise «VostSibneftegas»; 1991 – First reserves approval by the State Reserves Committee of the USSR; 1992 – «RUSIA Petroleum» formed to carry out exploration and development; 1999 – Start of the International Feasibility Study (IFS); 2001 – Inclusion of the Kovykta into the List of Subsoil blocks for PSA terms; 2003 – IFS completion with report submitted to the government 2004 – Announcement of Irkutsk Regional Gasification Project
131 210
16
277
593
34
1129
755
81
1407
572
840
200
400
600
800
1000
1200
1400
1600
1991 1995 2001 2003
C1, mcm
C2, mcm
Condesate, Mt
TNK-BP
InterrosIrkutsk Oblast
RUSIA shareholders
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Kovykta Phase 1 - Regional Project
Sayansk
Magistralniy
Okunysk
Sayansk
FIELD
Number of wells 14 new + 4 existing
Number of well pads 6
Number of CPF’s 1
Transportation
Component A B C
Length (km) 393 285 160
Diameter (inches)
24 24 6
Pressure (bar)
100 63/20 8
MARKETS
Component Phase 1a Phase 1b Customer
Methane0.001 bcma to Zhigalovo
2.5 – 4.0 bcma plateau
Industrial & municipal heat & power
C2+ and helium
NA280 kt of C2+and 7 mcm of He
Sayansk Chimplast& Geilimash
CondensateMinimal for remote well sites
163Kta plateau
RFE refineries via BAM
A
B
C
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Kovykta Phase 2 – Export Project
Market First Gas Plateau Sales Gas
Irkutsk 2008 4 bcm/a
North East China
2011 12 bcm/a
North China 2014 8 bcm/a
Korea 2011 10 bcm/a
Component IFS Estimate
Field & Facilities $6,5 bln
Russia Pipeline $5,6 bln
China Pipeline $5,2 bln
Korea Pipeline $0.7 bln
Total $18 billion
Kovykta Reserves
Development Capex
Sales Gas (bcm/a)
Indicator Value
Reserves bcm 1472
Build Up Period 9 years
Plateau Period 23 years
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Kovykta Gas Pipeline
Transneft Oil System /Taishet-Nakhodka PL
YURUBCHENO-TOKHOMSKOE
KOVYKTA
CHAYANDA
Sayansk
Irkutsk
ShenyangVladivostok
Yuzhno-Sakhalinsk
Skovorodino
Khabarovsk
Dalian
SAKHALIN
Harbin
Transportation Options
Manzhouli
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Gas Supply & Demand in Asia Pacific Region
0
20
40
60
80
100
120
140
160
180
200
bcm
a
2010 2020
China
0
10
20
30
bc
ma
2010 2020
Taiwan
0
5
10
15
20
25
bcm
a
2010 2020
USA West Coast
0
20
40
60
bcm
a
2010 2020
0
20
40
60
80
100
120
bc
ma
2010 2020
Total demand
Supply
Non-contracted demand
South Korea
Japan
30 BCM(2020)
Sakhalin I,II,III
Kovykta
Yurubcheno-Tokhomskoye
Chayanda
70 BCM(2020)
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Securing the Market Window
• North East Asia’s fast growing markets are the most logical target for East Siberian pipeline gas. Chinese annual demand growth 12 %, Korean 5,6 %
• Diversity and security of supply for Chinese and South Korean markets
• Market window in 2008 – 2011 exists in both China and South Korea; competition will be between Russian Pipeline gas and LNG imports in both markets. Next available market window 2015 – 2020
• Pipeline vs. LNG competition: With no deliveries of Russian pipeline gas, new LNG terminals will be built up in the markets of Korea and China. The LNG supplies will be sourced from Indonesia, Australia and Middle East, increasing price competition.
0
10
20
30
40
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Dem
an
d b
cm
/a
Domestic Imports North China North East China
Domestic Gas
Kovykta or LNG
Imports to NE
Imports to N
Market window in China
0
5
10
15
20
2008 2009 2010 2011 2012 2013 2014 2015
Dem
and
bcm
a
Expected Gas Shortage Build Up
Market timing in South Korea
Market Window
Kovykta delay
Conclusion
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Key Issues for Kovykta
Pipeline Routing
Market Demand Assurance
Stakeholder Alignment Project Development
• Kovykta gas is exported to
China & Korea or west to
UGSS
• Southern or Northern
route for Export
• Volumes & Pricing
• Timing of the Market
Window
• Deadlines for decision-
making
Governments:
• RF
• China
• Korea
Partner Companies:
• Gasprom
• TNK-BP
• CNPC
• Kogas
• Intergovernmental
Agreements
• Signing Long-Term
Contracts for Gas Supply
• Conducting Technical
Assurance
• Establishing Partnership
Configuration
• Secure Financing