Zarubezhneft will become a partner of Rushim in the development of the Kumzhinskoye and Korovinskoye fields in the Nenets Autonomous Okrug

According to Kommersant, Zarubezhneft will become a partner of Vitaly Yuzhilin’s Ruskhim in the development of the Kumzhinskoye and Korovinskoye fields in the Nenets Autonomous Okrug. Gas from the fields is planned to be sent to the future gas chemical complex (formerly Pechora LNG), which Zarubezhneft can also buy in the future: the agreement provides for a corresponding option. Analysts estimate investments in field development at 110–120 billion rubles.

Vitaly Yuzhilin’s Rushim is completing a deal with the state-owned Zarubezhneft to develop the Kumzhinskoye and Korovinskoye fields, gas from which in the future is planned to be sent for processing to a gas chemical complex in the Nenets Autonomous Okrug, three market sources told Kommersant. Kommersant’s interlocutors say that the agreement provides for parity participation in the development of fields: one of them suggests that it would be logical for Zarubezhneft to determine the price of gas for Rushim and fix it, as, for example, Gazprom does when buying gas at its subsidiaries.

Ruskhim has no experience in developing deposits, so it was looking for a partner. Including, as Kommersant wrote on November 29, 2023, Ruskhim negotiated with Gazprom Neft, but the company subsequently refused to participate. Zarubezhneft is developing the Kharyaginskoye field in the Nenets Autonomous Okrug, and also produces oil and gas on the shelf of Vietnam.

The reserves of the Kumzhinskoye and Korovinskoye fields amount to about 200 billion cubic meters. m. Ruskhim is going to build on their base a methanol plant with a capacity of 1.8 million tons per year (FID, according to one of Kommersant’s interlocutors, has not yet been adopted), as well as a port terminal near the village of Indiga for shipping methanol for export along the Northern Sea Route. According to one of Kommersant’s interlocutors, the agreement provides for an option for Zarubezhneft to purchase the entire project, including the gas chemical complex. Zarubezhneft, according to them, is generally interested in subsequently managing the project independently. As sources previously reported to Kommersant, CAPEX of the gas chemical complex was estimated at 220 billion rubles. excluding field development.

Ruskhim and Zarubezhneft declined to comment.

Initially, it was planned to build an LNG plant on the basis of the Kumzhinskoye and Korovinskoye fields. The project was unsuccessfully pursued by Dmitry Bosov’s Alltech, first alone, then in partnership with Rosneft. In 2016, Gazprom, which did not want a potential competitor to its gas to appear on the European market, was ahead of Rosneft in the fight for the Vaneyvisskoye and Layavozhskoye fields in the Nenets Autonomous Okrug. Thus, the LNG project lost the necessary resource base, which forced Rosneft to withdraw from the project in 2018. Vitaly Yuzhilin acquired the project at the end of 2020 after the death of Dmitry Bosov.

Kommersant’s market interlocutors consider the main problems of future construction to be high cost, lack of available technologies and long transport distances, since due to sanctions, virtually the only market for the products is China. “Iran, with its excess methanol capacity, is much closer to China and India. So the future of the project is directly related to the lifting of sanctions, when it will be possible to supply it to Europe and Western countries,” believes one of Kommersant’s interlocutors.

Sergei Kondratyev from the Institute of Energy and Finance notes that Zarubezhneft expects to gain synergy from participation in field development, since one of the company’s key production assets, Kharyaga, is also located in the Nenets Autonomous Okrug. The company has extensive experience in the Arctic and understands how to organize logistics in the region.

According to his estimates, investments in field development will amount to 110–120 billion rubles; depending on Zarubezhneft’s obligations within the project, the deal can be estimated at 20–25 billion rubles. “The profitability of the project will depend on the cost of methanol in the Asia-Pacific region. In recent years, we have seen a noticeable change in prices,” notes Sergei Kondratyev. “Of course, it is important how much logistics will cost. Now this is a rather complex project, taking into account the need to transport methanol on Arctic-class tankers if the shipment goes along the Northern Sea Route.”

Tatiana Dyatel, Olga Mordyushenko, Dmitry Kozlov