Marine and pipeline transportation scene in the Western Arctic area, and distances involved. The potential is huge, but within five to ten years oil and gas condensate could all be on stream via Murmansk for export.

Russian Barents Sea:
An energy Klondike

Current Russian estimates predict that one third of the country’s oil exports, or 150 million tonnes per annum – equal to Norway’s current prodution – will go through the Barents Sea shortly after 2015. Ambitious perhaps, but nobody could accuse the Russians of not thinking big. By 2015 fields like Shtokmanovskoye, Piltun-Astoksakoye, Lunskoye, Rusannovskoye, Leningradskoye, Priazlomnoye and others will be household names in the west and we will stop regarding the Arctic coast as an area best left to eccentrics, adventurers and fishermen.
The Russians have worked and explored these areas from Murmansk, Kara Sea and Laptev Sea through to East Siberian Sea and finally the Bering strait for decades. However, there is more urgency now and exports from Russia’s main oil and gas deposits must reach the marketplace as soon as technically possible.

Geopolitical
But there is another aspect worth noting; the geopolitical. The Barents Sea area and the vast northern stretches to the east are of great stategic importance to the Russians. The best way to secure it in this day and age is to develop its resources and keep the development under firm government control.
However this will not stop the Russians from co-operating with western companies, a strategy already well underway. Russia needs this co-operation to develop the huge resources, both technically and financially. Huge sums are required, between USD 10 billion and USD 25 billion for the vast Shtokman gas field alone.

Big Oil Playground
In an interesting book published last year “Big Oil Playground, Russian Bear Preserve or European Periphery, The Russian Barents Sea Region towards 2015”, the authors are listing three possible scenarios; Big Oil Playground, Russian Bear Preserve and European Periphery.
The first scenario is the most likely as it is obvious that Russia must grow to survive. The only proviso is that the Russian government is unlikely to relent an inch on the control. At the same time Russia is unlikely to use its huge oil and gas reserves in a power game with the west.
Recent estimates suggest that 90 per cent of the Russian shelves, covering between 5.2 and 6.2 million square kilometres, has gas and oil bearing areas. These are estimates and only that, but they indicate potential recoverable hydrocarbon re-sources of between 90 and 100 billion tonnes of oil equivalents, of which 80 per cent is natural gas. The West Arctic – the shelves of Barents Sea and Kara Sea – has two giant oil – and gas bearing basins in an area of around 2 million square kilometres. Estimated potential resources are between 50 and 60 billion tonnes of conventional fuels in oil equivalents. Exploration in the area reveals at least 10 big oil and gas fields, of which the biggest – Rusanovskoye and Leningradskoye in the Kara Sea are estimated at five trillion cubic metres of natural gas. In the Barents Sea the Shtokmanovskoye gas field and the Priazlomnoye oil field in the Pechora Bay are of special interest because they are the first to be developed. These fields have estimated reserves of 3.2 trillion cubic metres of gas and 20 million tonnes of gas condensate and perhaps more than 200 million tonnes of oil respectively. Another 20 big oil and gas bearing basins are located further east. And so it goes on right to the Sakhalin Island, where Sakhalin-1 and Sakhalin-2 are now being developed.

Shtokmanovskoye
This huge gas field was discovered as early as in 1988 and in 2004/5 preliminary co-operation agreements were signed between Gazprom and Roshelf and Statoil, Hydro, ChevronTexaco, ConocoPhillips and Exxon Mobil. The Norwegian companies Hydro and Statoil both have the necessary technology to develop the gas field through their experience on Ormen Lange and Snøhvit, and the Gasprom boss Alexei Miller has visited both companies recently. A USD 10 billion to USD 25 billion development plan is the basis for the negotiations and the gas is likely to be piped to a land-based plant near Mumansk for liquefaction and shipment in LNG carriers to the US.
The lincensee on the field is Sevmorneftegaz, which is owned by the state company Rosneft and the state/private Gazprom.

Field development
The development is expected to be in three or four phases incorporating four ice-strengthened platforms. Model testing of platform types are currently being carried out by the Krylov Institute in St Petersburg. Current estimates call for 156 development wells to be drilled, of which 144 are production wells, three monitor wells and nine reserve wells. Around 40 subsea well completions are anticipated in 350 metres of water. The whole field lies inside the Arctic and must prepare for icebergs of up to 1 million tonnes drifting at 0.25 metres per second and 1.2 metres drift ice moving at up to 1 metres per second. Under these conditions production, from deposits between 1,900 and 2,300 metres down, is expected to reach 100 billion cubic metres of gas anually, starting with 30 billion in phase one.
Between 22 and 24 billion cubic metres will be liquefied to produce 15 million tonnes of LNG to be shipped to the US. Transport from the field will require four 42 inch pipelines to the liquefaction plant at Teriberka, some 565 kilometres away. Some of the gas will eventually be piped from Teriberka via Medvezhegorsk to Vyborg, just north of Primorsk in the Gulf of Finland.

//Petter Arentz