Today in Kemerovo Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee and Aman Tuleev, Governor of the Kemerovo Oblast chaired a meeting dedicated to execution of a pilot coalbed methane production project.

Attending the meeting were heads and specialists of the Gazprom core business units and subsidiaries as well as representatives of the interested Ministries of the Russian Federation and the Kemerovo Oblast Administration.

While opening the meeting Alexander Ananenkov specified that development of efficient methods of coalbed methane production will enable to significantly expand Gazprom’s resource base and will have a social and economic effect. The successful project execution will provide reliable gas supply to producers and Kuzbass population as well as increase work safety at coal mines and stimulate improvement of the ecological situation in the industrial region.

In the frames of the first stage of the pilot coalbed methane production project at the Taldinskaya area of Kuzbass a test site equipped with necessary engineering infrastructure was developed and pilot wells were constructed, which are in pilot operation at present. The pilot operation resulted in the almost complete development of essential basis to execute a pilot coalbed gas production project.

Speaking about the project prospects the participants underscored that the lack of regulatory basis in the coalbed gas production and utilization sector prevents investment attraction for development of the non-conventional hydrocarbon reserves. The participants primarily offered to fill in coalbed methane into the industrial classification system as formulation of the legal acts for coal fields licensing aimed at regulating interaction between mining companies and gas fields within the coal and methane production in the same territory.

In the result of the meeting the parties specified that the first phase of a pilot project for coalbed methane production at the Taldinskaya area of Kuzbass basin was successfully completed. During 2007-2008 the parties plan to implement the second phase of the project. Under the second phase it is planned to create a necessary regulatory basis, develop design and budget documentation and in the second half of 2009 start coalbed methane production and supply to consumers.

Promgaz was tasked to continue work on the pilot coalbed methane production project including solving issues relevant to methane removal from facilities of Kuzbass basin mines with further extracted methane utilization for energy savings and heat supply mines.

The Kemerovo Oblast Administration in its turn introduces changes and supplements in the subsurface use laws aimed at solving issues relevant to the legal basis provision for coalbed methane production.

“Coalbed gas production is extremely important for the Kemerovo Oblast. Only Gazprom is able to organize production in the region. We hope that the leading gas company in the world will pay proper attention to this project and the Government will worthily support the project,” said the Kemerovo Oblast Governor Aman Tuleev.

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The most important issue of the Gazprom strategy is to expand hydrocarbon resource base due to development of the highest methane concentration areas in the crust as coalbed formations.

The scale of forecasted coalbed methane reserves in Russia can be compared to traditional natural gas fields and estimated at 49 tcm.

Kuzbass basin is a convenient area to organize coalbed methane production, which is famous for its well-developed infrastructure and favorable reserves allocation in relation to the Kemerovo Oblast large industrial centers.

Geologopromyslovaya Company Kuznetsk (GPK Kuznetsk) holds license for coalbed methane prospecting, exploration and production within the Yuzhno-Kuzbasskaya Group of coal fields containing methane reserves in amount of 6.1 tcm. Gazprom holds a control stake in GPK Kuznetsk.

The Agreement for coalbed methane production project execution between Gazprom and the Kemerovo Oblast Administration and GPK Kuznetsk was signed in May 2003.

Promgaz is a Gazprom’s subsidiary, which is one of the Company’s leading scientific centers. The major business activities of Promgaz are as follows: regional complex energy project development and energy savings programs, master plans and investment projects for gas supply and gasification of Russian regions, complex oil and gas field exploration projects as well as coalbed methane reserves.