Russian state-controlled oil producer Gazprom Neft has updated its long-term development strategy to meet the challenges of the energy transition, setting targets for prioritizing gas development projects and using its old fields to store the captured carbon dioxide.
Speaking earlier this week in Dubai, Gazprom Neft’s strategy and innovation department head Sergey Vakulenko said the company expects demand for natural gas to hold for âa long timeâ in the future.
The producer “will strive to keep gas available for demand that may stagnate or decline, but will not go away,” he said.
Focus on natural gas
Gazprom Neft seeks to develop, the objective being that gas represents 50% of its total hydrocarbon production by 2030.
According to an earlier statement, the company produced around 358 billion barrels of oil equivalent between January and June, with gas accounting for 22% of its production.
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The first deputy general manager, Vadim Yakovlev, said that the Russian Arctic will remain a major growth region for Gazprom Neft due to its significant resources.
Gazprom Neft’s Arctic projects on Russia’s Yamal Peninsula already account for 30% of the company’s hydrocarbon production and 50% of its investments, Yakovlev said.
âOur competitive advantage of operating successfully in the Arctic will allow Gazprom Neft to grow [Russian oil and gas] industry over the next decade. The company is focusing on gas and condensate, which will account for 80% of the expected production increase over the next decade, âhe added.
Gazprom Neft is developing deep gas reservoirs for the Kharasavey and Bovanenkovo ââfields where plateau production of over 112 million cubic meters of gas per day is expected.
“With a total unit cost of production in these fields of around $ 5 per barrel of oil equivalent, management is confident that Gazprom Neft will remain competitive while reducing its carbon footprint,” said Yakovlev.
CCS and hydrogen opportunities
Vakulenko said carbon capture and storage will be necessary to achieve the net zero goals. Therefore, Gazprom Neft is eager to expand its capabilities in this area and to offer CCS services to power generation companies and heavy industries.
âCarbon capture, use and storage now costs between $ 60 and $ 120 per tonne. It’s a mature technology that limits the potential for cost savings, âhe said.
âGazprom Neft would like more effective policies [to stimulate such projects] pursued âby governments.
Gazprom Neft plans to achieve zero bypass gas flaring by 2030 and also reduce its scope 1 and 2 carbon dioxide emissions by 30% to around 20.2 million tonnes of CO2 equivalent.
The company also plans to supply hydrogen to areas and industries that are difficult to electrify, such as the steel industry or long-distance transport.
Blue hydrogen from steam methane reforming with CCS is by far “the most accessible method of producing low-carbon mass hydrogen on sight”.
âGazprom Neft believes that the policies related to [the expansion of the use of] hydrogen should first focus on emissions and not on the raw materials used or the processes involved, âsaid Vakulenko.
Russian gas monopoly Gazprom owns a 95% stake in Gazprom Neft, however, the oil producer has enjoyed a degree of operational independence from its parent company which has yet to reveal a coherent plan on its goals. energy transition.