The Independent Gas Producers in Russia

Independent gas companies (that are not part of state-controlled Gazprom and have access to the unified gas supply system) are playing an increasingly significant part in the production and supply of gas in Russia. Today the suppliers of one-fifth of the gas deliveries in the federation, the independent sector possesses the greatest potential for growth: a solid resource base, superior technology and management hardened by obstacles and political forces to Russian-style market realities. No one is better suited for this next phase of gas industry development.

The Independent Gas Producers in Russia elucidates the most important aspects of the Russian independent gas-producing sector within a large, complex setting. The study provides:

• description of the independent sector within the gas industry as a whole, including the regulatory environment and the role of Gazprom
• analysis of the resource base on which the Russian gas market rests with details of regional holdings and licenses
• domestic and foreign demands for gas, including Central Asian gas suppliers and former Soviet Union purchasers and the geography of deliveries
• recent and forecasted production, pricing, sales and delivery of gas

The Independent Gas Producers in Russia offers a comprehensive study of the factors affecting supply and demand in the Russian gas market and used these factors to forecast scenarios for the independent sector through 2010 and in some cases, 2015.

The Independent Gas Producers in Russia also provides in-depth analyses of six independent gas producers:

Gas companies:

• Northgas
• NOVATEK

Vertically integrated oil companies:

• LUKOIL
• Rosneft
• Surgutneftegaz
• TNK-BP

The study reviews performance data for these companies from 2002 through 2004 or 2005, examines impediments and opportunities for each and forecasts the companies’ growth through 2010 or 2015.

The study is an essential analytical support tool for:

• energy policy-makers
• gas producers
• utilities and other gas consumers
• transportation, distribution and trading companies
• gas downstream companies
• banks and investment organizations
• contractors and equipment suppliers

Introduction

 
Chapter 1. Reserves, Production and Distribution of Gas in the Russian Federation
1.1. Resource base
1.2. Gas production
1.3. Gas balance, gas distribution
1.4. Transportation infrastructure
      1.4.1. Trunk gas pipelines 
      1.4.2. Gas distribution networks

 
Chapter 2. Independent Gas Producers
2.1. The raw material base of independent gas producers
2.2 Gas production by independent oil and gas producers
2.3. Utilization of gas by independent producers
2.4. Gas deliveries by independent producers by region and industrial sector
      2.4.1. Gas consumption by Russian Federation subjects 
      2.4.2 Gas deliveries to subjects of the Russian Federation
      2.4.3. Regions with greatest growth in gas deliveries from independent producers
      2.4.4. Gas deliveries by economic sector

 
Chapter 3. Regulation of the Independent Gas Producers' Market
3.1. Access to the gas transportation system
      3.1.1. Terms of access to Gazprom's gas pipelines
      3.1.2. Transmission tariffs for independents
      3.1.3 Pipeline infrastructure belonging to independents
3.2. Gas market pricing structure
      3.2.1. Deliveries of government-allocated gas 
      3.2.2. Deliveries of "over-the-limit" gas from Gazprom and independent producers
3.3. Gas prices in individual market segments 
      3.3.1. Deliveries of allocated gas
      3.3.2. Deliveries of "over-the-limit" gas and gas of independent producers 
      3.3.3. Typical trading arrangements

 
Chapter 4. Key Independent Gas Producers
4.1. Gas reserves of the selected companies
      4.1.1. Northgas 
      4.1.2. NOVATEK 
      4.1.3. Rosneft 
      4.1.4. LUKOIL
      4.1.5. TNK-BP 
      4.1.6. Surgutneftegaz
4.2. Gas production and sale
      4.2.1. NOVATEK 
      4.2.2. Northgas
      4.2.3. Surgutneftegaz 
      4.2.4. Rosneft
      4.2.5. TNK-BP 
      4.2.6. LUKOIL
4.3. Gas strategies of the selected companies
      4.3.1. NOVATEK 
      4.3.2. Northgas 
      4.3.3. Surgutneftegaz
      4.3.4. LUKOIL
      4.3.5. Rosneft
      4.3.6. TNK-BP

 
Chapter 5. Forecasts of Supply and Demand for Gas in Domestic Market
5.1. Forecast of gas demand
      5.1.1. Status 
      5.1.2. Forecast of gas prices 
      5.1.3. Forecast of gas consumption
5.2. Forecast of gas consumption in key economic sectors
      5.2.1. Status
      5.2.2. Consumption forecast by economic sector
5.3. Gas supply forecast
      5.3.1. Production forecast 
      5.3.2. Forecast of gas production by independent producers
      5.3.3. Domestic consumption
      5.3.4. Forecast of gas exports
      5.3.5. Forecast of gas balance

 
Chapter 6. Advances in Natural Gas Processing for Alternative Transport
6.1. Alternative methods of transporting unprocessed forms of gas
      6.1.1. Liquefied natural gas
      6.1.2. Compressed gas
      6.1.3. Natural gas hydrate
      6.1.4. Comparison of gas transformation and transportation methods
      6.1.5. Application of alternative methods of gas transportation in Russia 
      6.1.6. Gas transportation projects in Russia today
6.2. Natural gas processing methods
      6.2.1. Synthetic liquid fuel
      6.2.2. Technical and economic characteristics of SLF technology 
      6.2.3. SLF projects in Russia
      6.2.4. Gasto-electricity: opportunities for small-scale power generation

Figure 1. Companies that make up the independent gas market in Russia
Figure 1.1.1. Explored free gas reserves in Russia as of early 2004 (trillions of cubic meters)
Figure 1.1.2. Geographic distribution of explored reserves by region
Figure 1.1.3. Gas production costs ($ per 1000 cubic meters)
Figure 1.1.4. Comparison of Gazprom production rates with additions to reserves
Figure 1.2.1. Independent producers in Russia's total gas production
Figure 1.2.2. Growth in gas production by independent producers and Gazprom
Figure 1.2.3. Major gas producers among independent companies in 2005 (billions of cubic meters)
Figure 1.3.1. Russia's gas distribution as of the end of 2004
Figure 1.4.1. Decrease of UGSS capacity
Figure 2.1.1. Comparison of the selected companies by proved reserves, beginning of 2004
Figure 2.2.1. NG and APG production by independent producers
Figure 2.2.2. NG and APG in aggregate gas production by independent producers
Figure 2.2.3. Production of NG and APG by selected companies during 2005
Figure 2.2.4. Changes in NG and APG production by independent oil and gas producers
Figure 2.3.1. APG technical losses and gas used for internal needs by VIOCs and other oil companies
Figure 2.3.2. NG losses and use for internal needs by independent producers
Figure 2.3.3. Deliveries of APG to GPPs and external pipeline CSs
Figure 2.3.4. Gas balance as of the end of 2005
Figure 2.4.2. Shares of independent gas suppliers in regional supplies during 2004
Figure 2.4.4. Consumption of gas delivered via UGSS by selected sectors of the economy in 2004
Figure 2.4.5. Gas deliveries by independent producers to the domestic market in 2004
Figure 3.1.1. Transmission tariffs for independent gas producers
Figure 3.2.1. Russian gas market structure
Figure 3.2.2. Structure of gas deliveries to Russian domestic markets in 2004
Figure 3.3.3. Weighted average wholesale gas prices for industrial customers (exclusive of VAT)
Figure 4.2.1. Independent producers of gas and their supplies to Russian markets during 2004
Figure 4.2.2. Gas production by NOVATEK
Figure 4.2.3. Breakdown of NOVATEK's gas deliveries in 2004
Figure 4.2.4. Gas production by Northgas
Figure 4.2.5. Gas production by Surgutneftegaz
Figure 4.2.6. Gas production by Rosneft
Figure 4.2.7. Breakdown of Rosneft's gas deliveries in 2004
Figure 4.2.8. Gas production by TNK-BP
Figure 4.2.9. Breakdown of TNK-BP gas deliveries in 2004
Figure 4.2.10. Gas production by LUKOIL
Figure 4.2.11. Breakdown of LUKOIL gas deliveries in 2004
Figure 4.3.1. Gas production forecasts for the selected companies
Figure 4.3.2. NOVATEK's gas production, actual and forecasted
Figure 4.3.3. Northgas's gas production, actual and forecasted
Figure 4.3.4. Surgutneftegaz's gas production, actual and forecasted
Figure 4.3.5. LUKOIL's gas production, actual and forecasted
Figure 4.3.6. Rosneft's gas production, actual and projected (excluding RosneftSMNG and offshore projects)
Figure 4.3.7. TNK-BP’s gas production, actual and forecasted
Figure 5.1.1. Russia's primary FER consumption structure in 2004
Figure 5.1.2. Gas consumption in Russia
Figure 5.1.3. Historical comparison of gas, coal and heating oil prices based on fuel calorific efficiency
Figure 5.1.4. Forecast of gas prices for industrial customers
Figure 5.1.5. Forecast of domestic gas consumption under most likely scenario
Figure 5.2.1. Consumption of gas delivered via UGSS by selected sectors of theeconomy in 2004
Figure 5.2.2. Gas consumption in Russia by economic sector
Figure 5.2.3. Gas consumption by the electric power industry
Figure 5.2.4. Gas consumption by the metallurgy industry
Figure 5.2.5. Gas consumption by the agrochemical industry
Figure 5.2.6. Gas consumption by the petrochemical industry
Figure 5.3.1. Forecast of APG production by independent producers
Figure 6.1.2. Tanker for carriage of compressed natural gas (design by Knutsen OAS)
Figure 6.1.3. Flow chart for LNG, CG and NGH transformation and transportation
Figure 6.2.1. Process flow chart for converting natural gas into SLF

Table 1.1.1. Distribution of reserves by wholly owned subsidiaries and affiliated companies of Gazprom at the beginning of 2004 (billions of cubic meters)
Table 1.1.2. Reserves by region as of the beginning of 2004 (billions of cubic meters)
Table 1.1.3. Reserves by field as of the beginning of 2004 (trillions of cubic meters)
Table 1.3.1. Gas balance of the UGSS
Table 1.4.1. Primary Components of Russia's UGSS as of the end of 2004
Table 1.4.2. Operating lives of UGSS linear pipeline portion
Table 1.4.3. Capital investments in UGSS during 2005
Table 2.1.1. Free gas reserves of selected companies, beginning of 2004
Table 2.2.1. Gas production in Russia by all producers (millions of cubic meters)
Table 2.3.1. Gas balance of independent producers (billions of cubic meters)
Table 2.4.1. Gas deliveries by Gazprom and independent suppliers via USSG and other GTS to regions of the Russian Federation (millions of cubic meters)
Table 2.4.2. Russian subjects consuming the largest amount of gas (millions of cubic meters)
Table 2.4.3. Gas deliveries and rates of growth for regions with fastest growing demand (millions of cubic meters)
Table 2.4.4. Regions with the highest share of independent supplies in 2004
Table 2.4.5. Highest rates of growth in gas delivery from independents
Table 2.4.6. Gas consumption in Russia by selected sector (billions of cubic meters)
Table 3.3.1. Prices of independent gas producers by tariff zone at the beginning of 2005
Table 3.3.1. Prices of independent gas producers by tariff zone at the beginning of 2005
Table 4.1.2. Gas reserves attributed to NOVATEK fields as of the beginning of 2004
Table 4.1.3. Rosneft's gas reserves as of the beginning of 2004
Table 4.1.4. LUKOIL's gas reserves as of the beginning of 2004 (Continuation)
Table 4.1.5. Gas reserves attributed to TNK-BP fields as of the beginning of 2004
Table 4.1.6. Gas reserves contained in Surgutneftegaz's fields as of the beginning of 2004
Table 4.2.1. NOVATEK gas use (millions of cubic meters)
Table 4.2.2. NOVATEK's gas supplies for processing (millions of cubic meters)
Table 4.2.4. NOVATEK's direct gas deliveries to customers (millions of cubic meters)
Table 4.2.5. Gas use by Northgas (millions of cubic meters)
Table 4.2.6. Direct deliveries of gas to customers by Northgas (millions of cubic meters)
Table 4.2.7. Gas use by Surgutneftegaz (millions of cubic meters)
Table 4.2.8. Surgutneftegaz gas deliveries for processing (millions of cubic meters)
Table 4.2.9. Surgutneftegaz direct gas deliveries to customers, billion cubic meters
Table 4.2.10. Rosneft's primary gas producing regions (millions of cubic meters)
Table 4.2.11. Gas use by Rosneft (millions of cubic meters)
Table 4.2.12. Rosneft's gas deliveries for processing (millions of cubic meters)
Table 4.2.13. Rosneft direct deliveries to customers via GTS (millions of cubic meters)
Table 4.2.14. TNK-BP primary gas producing regions (millions of cubic meters)
Table 4.2.15. Gas use by TNK-BP (millions of cubic meters)
Table 4.2.16. TNK-BP gas deliveries for processing (millions of cubic meters)
Table 4.2.17. TNK-BP direct deliveries to customers via GTS (millions of cubic meters)
Table 4.2.18. LUKOIL's primary gas producing regions (millions of cubic meters)
Table 4.2.19. Gas use by LUKOIL (millions of cubic meters)
Table 4.2.20. LUKOIL gas deliveries for processing (millions of cubic meters)
Table 4.2.21. LUKOIL direct deliveries to customers via GTS (millions of cubic meters)
Table 4.3.1. NOVATEK's gas production targets by largest subdivisions (billions of cubic meters)
Table 4.3.2. LUKOIL's gas production targets by region (billions of cubic meters)
Table 4.3.3. Rosneft's gas production targets by region (billions of cubic meters)
Table 5.2.1. Gas consumption in Russia by economic sector (billions of cubic meters)
Table 5.3.1. Forecasts of gas production by Gazprom
Table 5.3.2. Gazprom estimate of deliveries to domestic markets via UGSS (billions of cubic meters)
Table 5.3.4. Ukraine's gas balance in 2005 (billions of cubic meters)
Table 5.3.5. Projected deliveries of Central Asian gas to Russia (billions of cubic meters)
Table 5.3.6. Russia's 2010 gas balance, excluding gas deliveries by independent companies (billions of cubic meters)
Table 6.1.1. A comparison of type of gas by deposit requirements and transportation and storage limitations
Table 6.2.1. SLF plant projects worldwide

Map 1.4.1. Key directions of UGSS trunk gas pipelines 
Map 6.1.5. Gas transformation methods for gasproducing regions of Russia