TNK-BP is going to build a gas processing plant in the Pokrovskoe field of the Orenburg Region with a capacity of 450 million cubic meters by 2012. This plant will allow the company to utilize almost 100% of its associated petroleum gas, but its construction

will cost the company several hundred million dollars. Experts,
however, justify these expenditures because the oil companies failing
to meet the associated gas utilization norms will face the risk of
losing their field development licenses starting from 2012.
Yesterday, Nikolai Khromov, Director of the Zaikinsky Gas Processing
Plant, announced that the company is going to build its own gas
fractionation facility in the Pokrovskoe field of the Orenburg Region.
Gas treatment and processing at the new plant will produce lean gas,
propane and butane. TNK-BP confirmed this information and added that
the gas processing plant will have a capacity of 450 million cubic
meters and be launched in 2012.
TNK-BP did not specify the exact amount of investments into this
project saying that it may vary considerably due to the unstable
economic situation. “We are talking about several hundred million
dollars,” said a company representative. After the launch of the plant,
the level of associated petroleum gas utilization in the Pokrovskoe
field will rise up to 98–99%. The company will supply treated dry gas
to the gas transportation system of Gazprom. “We have reached an
agreement and received technical specifications for connecting to their
pipeline,” noted the representative of TNK-BP.
The Pokrovskoe field in the Orenburg Region was discovered in 1961. The
license for its development was granted to Orenburgneft, a subsidiary
of TNK-BP. The recoverable in-place reserves of oil in the field are
estimated at about 70 million tons.
Currently, approximately 200 million cubic meters of gas is produced in
the Pokrovskoe field and treated at the Otradnoe Gas Processing Plant
of Rosneft in the Samara Region. “We can produce twice as  much, but
Rosneft cannot accept such volumes of gas,” said company
representatives. TNK-BP is going to produce a total of 12.1 billion
cubic meters of gas in 2009, 80% of which will be associated petroleum
gas. According to the information provided by the company, more than
$600 million has been invested into associated petroleum gas
utilization projects by the end of 2008. TNK-BP intends to invest
another $700 million into these projects by 2012. The average level of
associated petroleum gas utilization, which is now around 80%, will
reach 95% by that time.
Vitaly Kryukov, analyst of IFD Capital, pointed out that construction
of new processing facilities is included in the strategic plan of the
company until 2012. By 2015, the share of the company’s gas business
will grow up to 20%. “Now, TNK-BP is increasing its gas production for
generating additional profits. At the same time, according to
governmental recommendations, Gazprom, in spite of the drop of gas
consumption in Russia and abroad, does not reduce reception of
associated petroleum gas from oil companies. Apparently, TNK-BP is sure
that this situation will not change in near future,” said the analyst.
He estimated the cost of the gas processing plant at $150 million.
Denis Borisov from IK Solid estimated the construction cost much higher
– at $200–400 million and added that these capital expenditures will be
fairly justified. According to governmental directions, the level of
associated petroleum gas utilization must be at least 95% for all oil
companies beginning from 2012, otherwise the companies may be deprived
of their field development licenses. Apart from that, the new plant
will generate additional profits for TNK-BP as gas prices will be
liberalized by 2012,” said the expert.

Source: Kommersant

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