Expert: in East Siberia chemical utilization of natural gas will be advanced

8 december 2014

A conference “Oil and gas of East Siberia” took place in Moscow in early December. During the Conference projects on oil-gas fields of East Siberia development from the point of view of a range of problems – from upstream to logistics and development, were discussed.

A year ago the President of the Russian Federation Vladimir Putin announced the global aim of creating in the Far East of the country a rapid development territories chain. This region has vast oil and gas reserves, but extraction is hampered because of geological aspects, climate and infrastructure. For effective reclamation of these resources particular approach, vast investments and innovative technologies are needed.

The Head of the Department for Fuel and Energy Sector Victoria Gimadi conducted a session where experts discussed petrochemical industry development in East Siberia and its role in oil and gas projects efficiency raising.

"The role of petrochemical industry in Russian economy at the moment is not that big as it could be", said Ms. Gimadi. According to the RF Ministry of Energy estimates which were introduced by the expert, in 2012 petrochemical industry fraction in Russian GDP accounted for 1.5%. "If we compare it with 2009 when this index accounted for 0.4%, we can mark a drastic development of the sector", said Ms. Gimadi.

Petrochemical industry development is among Russian energy strategy development priorities. In Russian chemical utilization of natural gas and petrochemistry development plan up to 2030, which was developed by the RF Ministry of Energy, there is an intention to solve sectors' urgent problems by means of 6 industrial clusters creation: West-Siberian, Volga Region, Caspian, East-Siberian, North-Western, Far Eastern. Headmost are West-Siberian and Volga region ones, and Far Eastern does not drop behind the others (there are only projects). For industrial clusters development various options are considered: import substitution in current consumption, consumption growth, supply of export products. The Russian Federal State Statistics Service and the Federal Customs Service statistics give reasons to speak about import substitution considerable potential, products may be able to meet competition in transportation expenses and in raw materials costs.

Petrochemical industry products release, which is used in construction, housing and communal services provision and other sectors, is planned to be considerably accumulated up to 2030, according to the Plan. For the plan realization a resources' production gain is needed, especially in East Siberia, fields of which are under high hopes. However, current economic climate makes its allowances. "The Plan initially was formed on the basis of economy growth prognosis, and now it is too optimistic. In present economic conditions The Ministry of Economic Development had to reconsider economy growth prognosis off to reduction. If we are not waiting for economy growth high rates then it is necessary to reconsider or refine petrochemical industry products release plans", said Ms. Gimadi.

The expert mentioned a research which contains petrochemical industry projects development limitation in East Siberia, in particular sector members frequently note limitations connected to low efficiency of foreign trade policies, heavy prices on electrical energy, transport and personnel affairs. Another topical issue in petrochemical industry projects implementation in East Siberia is optimum helium utilization, which Chayanda field is famous for - the main resource for "Power of Siberia" pipeline, on which gas supply agreement with China was signed in 2014.

3 most peculiar issues in petrochemical industry projects development in Russian Far East are: infrastructural limitations, abled-bodied population drain and demand ambiguity. "Infrastructural issues make cluster development extremely nominal. Raw materials sources and plant are widely-spaced, so who will be chargeable for connecting infrastructure development implementation - this is the question", said the expert. Another equally important issue is that of human resources, as statistics mark gainfully occupied population drain from East Siberia and Far East of the country. Finally, home and external demands ambiguity causes experts anxiety. During the roundtable in the Analytical Center where prospect of gas and oil industry development in the country's East were under discussion, participants did not agree on prospects of home demand, reminded the expert. "There is a potential, but it needs to be determined more precisely", said Ms. Gimadi. 

The expert observes the chemical utilization of natural gas in East Siberia development prospects. "There is oil extraction in the region, contracts are defined, and if there are prospects of additional projects development, they are gas-based", considers Ms. Gimadi.