Gas use-related agreements signed

RELEASE

A number of documents in the area of gas use were signed today at the St. Petersburg International Economic Forum 2021.

Alexey Miller, Chairman of the Gazprom Management Committee, Nikolai Shulginov, Minister of Energy of the Russian Federation, and Sergey Tsivilev, Governor of the Kemerovo Region - Kuzbass, entered into an Agreement on gas supply and gas infrastructure expansion in Kuzbass, including through coalbed methane (CBM) liquefaction.

The parties intend to cooperate on the matters related to the implementation of Gazprom's investment projects in the region, first of all, the project for extracting methane from the coal formations of the Southern Kuzbass group of coal fields (the subsurface use license is held by Gazprom Dobycha Kuznetsk). The Company is currently conducting geological exploration at Naryksko-Ostashkinskoye, one of the CBM fields of the group.

The produced CBM will be sent for liquefaction. To that end, a small-scale liquefied natural gas (LNG) plant with an initial capacity estimated at 26,000 tons per year (allowing for a further increase) will be built in close proximity to the production site. The plant's output will be used to convert mining equipment to LNG and to replace coal fuel in the Kemerovo Region, particularly in the Sheregesh ski resort.

Alexey Miller, Denis Manturov, Minister of Industry and Trade of the Russian Federation, and Sergey Tsivilev inked an Agreement on the development of equipment and technologies for the construction of wells, production of gas from CBM reservoirs, and subsequent processing and liquefaction of this gas in Kuzbass.

The document envisages, inter alia, engaging domestic manufacturers, primarily from the Kemerovo Region, in the creation of such equipment and technologies. To manufacture industrial goods, the existing local facilities may be employed or new facilities may be built in the region. It is planned to use the finished goods at Gazprom's facilities and the region's coal enterprises.

Gazprom and coal companies will determine the demand for the technologies and machinery required for the CBM fields development and for gas liquefaction equipment. Based on the obtained data, the regional Government will prepare appropriate business plans and address the issues of state support required for the launch of new competitive products.

Sakhalin Energy (operator of the Sakhalin II project) and Sovcomflot signed long-term time charter contracts for the operation of two green series tankers named Prospect Korolyova and Prospekt Vernadskogo. The duration of freight is 10 years starting from 2024.

Attending the signing ceremony were Alexey Miller, Alexander Novak, Deputy Prime Minister of the Russian Federation, and Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

The main advantage of the abovementioned oil tankers is their ability to use LNG as primary fuel for the main and auxiliary power units. Compared to conventional fuels - marine fuel oil and diesel fuel - LNG provides a considerable reduction of greenhouse gas emissions.