Novatek Gas

completed

_x000C_ Independent Russian gas producer OAO Novatek (the sponsor) has requested IFC assistance in the staged development of a large natural gas and condensate field in the Yamalo-Nenets Autonomous Region of Russia’s Artic Circle. The Yurkharovskoye Gas and Condensate Field is operated by OOO Yurkharovneftegaz (YNG or the project company), a wholly owned subsidiary of OAO Novatek. OAO Novatek has interests in a diverse range of wholly-owned subsidiaries including operating fields producing oil, gas and condensate plus downstream plastics industries. There are also pipelines for oil, gas and condensate. The company also has stakes in a number of JV’s. There are major expansion plans in downstream processing and petro-chemicals. The main recipient of IFC finance will be YNG which operates the Yurkharovskoye field (290 sq. km.), which has proven reserves of 208 billion cubic meters (bcm) (7.35 trillion cubic feet (tcf)) of gas and 106 million barrels (mmbbls) of condensate. The western portion of the field lies on the Tazov Peninsula, and the eastern portion lies under the shelf on the west side of the Bay. Administratively, the current YNG operations fall into the Nadym raion or municipality. Some of the company’s exploration area falls into the Tazovskiy municipality, and the closest communities are Nakhodka and Tazovskiy. However, Purovskiy municipality is important because the settlement of Samburg belongs to it, and migratory herders from Samburg use the area around the field operations as summer pasture for reindeer. The field was discovered in 1970 by the Tazovskaya Oil and Gas Expedition (Tazovskaya NGRE), which was part of the production and geological enterprise, Zapolyargeologia (PGO). However, due to its lack of infrastructure and the more prolific fields discovered in the area, it was decided not to include this particular field in the development program of the Ministry of Gas. The project financed by IFC is based on proven reserves and maintaining annual production of 9 bcm/y. The gas and condensate are transported through the region’s extensive existing natural gas and liquids pipeline infrastructure to industrial consumers in the domestic market or for further processing.