RUSSIA’s third largest oil firm, TNK-BP, said yesterday it was to invest $3.8bn (£2.4bn) in its gas business over the next three years in a bid to more than double production to 30bn cubic metres (bcm) by 2020.
The oil firm, which is half-owned by British oil company BP, will invest $1.8bn between now and 2013 in developing associated gas from its oil deposits. TNK-BP said this was in order to meet a government target of increasing associated gas utilisation to 95 per cent by 2012.
Associated gas is often found dissolved in oil at high pressures existing in a reservoir or as a gas cap above the oil
Vice president Alistair Ferguson said yesterday associated gas would provide over half of the oil firm’s production.
“Critical to achieving this (95 percent utilisation rate) is getting associated gas priority access to the gas pipeline. But you also need to have customers for it, so access to the power market is another important element,” added Ferguson.
The firm will also invest $2bn on regular natural gas extraction projects over the next three years, putting the total natural gas investment plan at $3.8bn.
TNK-BP, is set to produce 13 bcm of gas this year from 143 fields and already processes 85 per cent of the associated gas that it extracts from the ground together with oil.
Part of TNK-BP’s $1.8bn associated gas utilisation project is a $700m investment in its own energy projects, such as gas processing facilities and power plants, which will supply electricity for the firm’s own oil field operations.
But that output target does not factor in the gas assets it is in negotiations to buy from BP in Venezuela and Vietnam.
It does, however, include potential unconventional gas production in Ukraine, where TNK-BP has submitted applications for six licences to invest $50m to explore for tight gas.
TNK-BP’s main gas-producing assets in Russia are its Rospan fields in Arctic Yamal-Nenets region in the Arctic. Production at Rospan grew by 12 per cent year-on-year for January to September 2010 to 1.9 bcm.