OREANDA-NEWS. November 23, 2007. TNK-BP is going to increase its gas production in 2008 by 14% compared to 2007 up to 16 billion cubic meters, said Alexander Berezikov, Vice President BP for Marketing, Supply, Trading and Transport of Gas and Condensate, TNK-BP Management, on the sidelines of the Fifth International Forum “Russia Gas–2007.”

The company is planning to produce 6.5 billion cubic meters of gas in the Nizhnevartovsk Region, of which 2.7 billion cubic meters will be produced by Rospan, approximately 700 million cubic meters in the Nyagan Region, and approximately 800 million in the Orenburg Region. The rest of the targeted volume will be lean dry gas produced by associated petroleum gas processing.

In 2007, TNK-BP will produce 14 billion cubic meters of gas, of which 1.6 billion cubic meters will be produced by Rospan. According to Mr. Berezikov, the initial target of gas production by Rospan was 1.7 billion cubic meters, but the actual production was lower because of the voluntary drop of gas production by Russian companies due to the unusually warm winter.

Mr. Berezikov said that Rospan is going to increase its gas production in 2008 by 68.7% up to 2.7 billion cubic meters. A request for transportation of this volume of gas has been sent to Gazprom, and TNK-BP is waiting for the response of the gas monopoly in late December, added Mr. Berezikov.

Preliminary negotiations for cooperation of TNK-BP and Gazprom corroborate that this volume of gas production by Rospan in 2008 may be approved.

Mr. Berezikov said that TNK-BP, with the exception of Rospan, is no longer suffering from limitations in access to the gas transportation system of Gazprom. Meanwhile, the main problem of Rospan, according to Mr. Berezikov, is “limitations on gas transportation through the internal gas pipeline of Urengoigazprom.” TNK-BP is expecting to receive technical conditions from Gazprom in 2007 for direct connection to the gas transportation system of the gas monopoly near Urengoi, which will require construction of a gas pipeline 80 km long with a tentative cost of $3 million per kilometer.

If technical conditions for connection are provided by Gazprom in 2007, TNK-BP will start designing the gas pipeline in 2008 so as to begin its construction in 2009. Then Rospan will be able to increase its gas production up to 9 billion cubic meters by 2012 and up to 16 billion cubic meters by 2014.

Speaking about the volumes of gas that may be sold by TNK-BP at the electronic marketplace of Mezhregiongaz, Mr. Berezikov reminded that these volumes must be included as a separate line in the gas balance of Russia. Mr. Berezikov said that TNK-BP was going to sell approximately 300 million cubic meters of gas at the electronic marketplace but in fact sold only about 30 million cubic meters because of transportation limitations. Mr. Berezikov thinks that the company will be able to sell 300 million cubic meters of gas at the electronic marketplace in 2008.