RusGazDobycha Deepens Ties to Gazprom, Eyes IPO

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Well-connected private Russian company RusGazDobycha is boosting activity across the natural gas value chain from upstream to petrochemicals including stepping up its cooperation with state-run Gazprom, the world's biggest gas company. RusGazDobycha believes that it might eventually lead to an initial public offering (IPO), although investors tend to be more cautious about oil and gas amid the accelerating energy transition. RusGazDobycha plans in August 2022 to start gas production from the Semakovskoye field in West Siberia, Andrei Frolov, CEO of the project operator RusGazAlyans, told Energy Intelligence during a field trip last week. RusGazAlyans is a joint venture between RusGazDobycha and Gazprom (NC Sep.24'20). The launch will become the first step for RusGazDobycha’s 50-50 partnership model with Gazprom to be applied at other ventures like the huge Tambei project in the Arctic. The duo also plan to launch the 45 billion cubic meters per year Ust-Luga gas processing and LNG plant in northwestern Russia in 2024, with construction already under way since May 2021. They plan to start the Tambei field in 2026 to feed Ust-Luga (NC May27'21). They will also consider building another large gas processing facility in the Volga area that might have synergies with gas exports via the Turk Stream pipeline. Semakovskoye Nears Launch The Semakovskoye gas field is developed on a step-by-step basis. “The staged approach enables us to improve time schedule, manage geological and technological risks, adapt to the market and control the investment budget in a more efficient manner,” Konstantin Makhov, CEO of RusGasDobycha told reporters. From Phase 1 scheduled next year, RusGazAlyans plans to produce 7.5 Bcm/yr. Semakovskoye will reach the 14.2 Bcm/yr plateau with Phase 2, now expected in 2027, Frolov said. Phase 3 is planned in 2035 to maintain the field’s plateau. RusGazAlyans will complete Phase 1 drilling in early 2022, Frolov said. It is now drilling the 15th of the total 19 production wells at Phase 1. Semakovskoye is the largest of the Parusovy group of fields. The other two -- Parusovoye and North Parusovoye – will have a combined plateau of around 2.5 Bcm/yr. RusGazAlyans has yet to make a final investment decision on Parusovoye and North Parusovoye, but the plan is to launch both simultaneously with Gazprom’s nearby 15.1 Bcm/yr Kamennomysskoye-Sea offshore field in the Ob Bay in 2027. Gazprom will build a pipeline from Kamennomysskoye-Sea to the unified gas transportation system’s entry point in Yamburg, and both Parusovoye and North Parusovoye will be connected to this pipeline. From Semakovskoye, RusGazAlyans will build a separate 121.9 km gas pipeline to Yamburg. Semakovskoye Phase 1 costs around 80 billion rubles ($1.1 billion), of which 70 billion rubles is covered by project financing raised by RusGazAlyans, Makhov said. “The idea of the joint venture has been to let Gazprom invest no money, except for the historical costs of geological exploration,” Makhov said. Tambei Field Options A similar financing scheme is planned for the Tambei field in northeastern Yamal Peninsula, which should ease the pressure on Gazprom’s investment program, according to Makhov. The TambeiGazDobycha 50-50 joint venture will be the operator. From Tambei, a pipeline may be built to Yamburg in the Nadym-Pur-Taz area across the Ob Bay. Alternatively it might go to Bovanenkovo in western Yamal Peninsula where Gazprom’s northern gas corridor to the Baltic Sea runs from, Makhov said. From Bovanenkovo, a new separate pipeline will be needed for ethane-rich gas, while from Yamburg gas can flow via the existing pipelines, replacing the declining production from mature fields in the area, he explained. Gazprom will only have to upgrade the exiting pipes to transport ethane-rich gas, he said. There is already a separate line for ethane-rich gas from Nadym-Pur-Taz, an initial resource base for Ust-Luga. Gas Processing Expansion RusGazDobycha is considering expanding its gas processing partnership with Gazprom. The antimonopoly watchdog has approved it to manage the Gazprom Neftekhim Salavat petchem complex in the republic of Bashkortostan, where RusGazDobycha wants to build a gas processing facility, Makhov said. RusGazDobycha believes Gazprom Neftekhim Salavat can create value for Gazprom’s reserves by extracting ethane and supplying dry gas further south into the 31.5 Bcm/yr Turk Stream export pipeline, Makhov said. It can be comparable in size with Ust-Luga or Gazprom’s 42 Bcm/yr Amur gas processing plant in Russia’s Far East, he said. In southern Russia, Gazprom also considers a separate ethane production project at the Astrakhan gas processing plant (NC Jun.17'21). Path to IPO RusGazDobycha will consider an IPO after Ust-Luga ramps up in 2025, Makhov said. The company’s value should be boosted by the operational cash flows, repaid debt, and upstream licenses transferred to its joint ventures with Gazprom. The company’s ownership structure is still not clear, however. It is associated with Artyom Obolensky – former business partner of tycoon Arkady Rotenberg (NC Jul.22'21). “RusGazDobycha has one shareholder – National Gas Group that includes legal entities as well as a part belonging to the management team. We reveal our full structure to counterparts under NDA (non-disclosure agreements) and not once have gone through due diligence procedures with leading world companies. We are under the microscope when signing long-term deals with equipment suppliers, including from Europe and the US. We see ourselves as a publicly traded company, we don’t have problems with that,” Makhov commented. Vitaly Sokolov, recently at Semakovskoye Field

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