Gazprom and YATEK Avdolyan are fighting for two gas fields in Yakutia

“Gazprom” and the Yakutsk Fuel and Energy Company (YATEK), controlled by Albert Avdolyan’s A-Property, filed applications for participation in auctions for the right to geological study, exploration and production of minerals in two gas fields in Yakutia. This was reported to Vedomosti by a representative of the Ministry of Natural Resources. We are talking about subsoil plots “Suntarsky 1” (reserves and resources – 574.8 billion cubic meters) and “Gorny” (280 billion cubic meters). According to a spokesman for the ministry, the Irkutsk Oil Company (INC) has also applied for Suntarsky-1.

Open auctions for both sites will be held on June 28, 2023 on the electronic trading platform of Gazprombank, follows from the auction documentation. The auction will be held on the increase with a step of 17.8 million rubles. and 2.7 million rubles. respectively.

The starting payment in the auction for Suntarsky 1 is 178 million rubles, for Gorny – 26.7 million rubles. Auction winners will be granted licenses for 25 years.

The Suntarsky 1 site is located on the territory of the Vilyuisky, Verkhnevilyuisky and Nyurbinsky regions of Yakutia. Gas reserves are (in categories C1, C2, D0) 14.8 billion cubic meters. m, resources (categories Dl, D1, D2) – 560 billion cubic meters. m, gas condensate resources – 33.6 million tons. “Gorny” is located in Vilyuisky, Gorny and Kobyaysky districts of the republic. Its resource base is somewhat more modest: gas resources (in categories D1 and D2) amount to 280 billion cubic meters. m, gas condensate – 9 million tons.

According to Rosgeolfond, the Suntarsky 1 block borders on the Tyukyansky and Varvarinsky blocks of Gazprom. The Gorny site is located next to the Kastyr-Sakharny site of Gazprom, as well as the Mastakh and Sobolokh sites of YATEK.

The development of gas production in Yakutia is provided for by the Eastern Gas Program (“Program for the creation in Eastern Siberia and the Far East of a unified system for the production, transportation of gas and gas supply, taking into account the possible export of gas to the markets of China and other Asia-Pacific countries”), approved in September 2007 by order Ministry of Industry and Energy of Russia. Work on its implementation is supervised by Gazprom.

The program provides for the creation of several gas production centers, including Yakutsk. The basis for the formation of the Yakutsk center is the Chayandinskoye field with reserves of 1.2 trillion cubic meters. m of gas. It, along with Kovykta in the Irkutsk region, is the resource base of the Power of Siberia project, under which Russian gas is supplied to China. Gas production at the field began in 2019.

Gazprom on its official website indicates that the creation of the Yakutsk gas production center is aimed primarily at providing gas to Russian consumers, creating conditions for gas supply and gasification of settlements in Yakutia and other regions of the Far East.

Ekaterina Krylova, managing expert of the PSB Analytics and Expertise Center, notes that for Gazprom, which is implementing the strategy for the development of the Yakutsk gas production center, the sites put up for auction are promising in terms of geographical location, given the “orientation of exports to the East”.

Senior analyst “BCS The world of investment” Ronald Smith notes that the increase in gas reserves in Yakutia could theoretically allow Gazprom to increase supplies through the Power of Siberia gas pipeline or extend the contract for gas exports to China. Analyst FG Finam Sergey Kaufman admits that Gazprom’s interest in assets in Yakutia may be related to the company’s plans to implement small-scale production of liquefied natural gas (LNG) near Yakutsk.

YATEK is implementing the Yakutsk LNG project in the region (capacity – 8.9 million tons per year. – Vedomosti), Kaufman recalls. Krylova notes that Yakutia is a key region for YATEK. Therefore, the struggle at the auction, in her opinion, will be serious.

She recalls that at the end of 2021, when Gazprom received three sites in the region (Tyukyansky, Kastyr-Sakharny and Varvarinsky), their price increased many times during auctions. “The price for the first plot during the auction increased by 91 times, for the second plot – more than 2,000 times, for the third – 121 times. The cost of the three sites amounted to 1.2 billion rubles,” says Krylova.

According to Smith, there should be no interest in areas in Yakutia from other oil and gas companies. “Other big players, including”Rosneft” And “Surgutneftegaz“, there are already gas resources in the region, which they have not yet monetized,” he explains.

Vedomosti sent inquiries toGazprom“, YATEK and major oil and gas companies.

Smith adds that the winner of the auction will have to invest in infrastructure development to develop the reserves of the Suntarsky 1 and Gorny blocks, since they are located far from the active fields.

Yakutia is one of the most promising regions for gas production – more than 2.7 trillion cubic meters are listed on the state balance sheet. m category C1 + C2, says the managing director of the NRA rating service Sergey Grishunin. “The development of resources in the republic is only 20%, so we can talk about the presence of a significant potential for growth in production in the region, which in the future will make it possible to compensate for the decline in gas production in Yamal,” he notes. Given the proximity to the growing markets of China and the Asia-Pacific countries and India, projects in the region will pay off within 10-15 years, the analyst adds.