The Gazprom Headquarters hosted a meeting today dedicated to ensuring the acceptance of dry stripped gas (DSG) produced from associated petroleum gas (APG) from petroleum companies into the Gazprom gas transmission system. The meeting was moderated by Alexander Ananenkov, Deputy Chairman of the Company’s Management Committee.

Participating in the meeting were Vasily Podyuk, Head of the Gas, Gas Condensate and Oil Production Department, heads and experts of the Gazprom core business units.

The meeting addressed the progress in implementing the instructions of the Russian Federation President and Government in relation to the enhancement of associated petroleum gas utilization efficiency.

In particular, the participants considered current issues of petroleum companies’ access to the gas transmission system as well as the prospects for accepting DSG produced from APG recovered from petroleum companies’ fields into the Gazprom gas transmission system. Special attention was paid to the information on construction and reconstruction of Gazprom’s production facilities with a view to ensure DSG acceptance from petroleum companies.

It was emphasized that at the moment Gazprom was ensuring prioritized acceptance of DSG produced by petroleum companies in compliance with industrial requirements and technical capabilities.

Based on the meeting results assignments were given to optimize DSG acceptance into the Gazprom gas transmission system in the long term.

Background:

In 2007 Gazprom elaborated a set of measures aimed at the successful solution of the associated petroleum gas (APG) utilization problem. The developed proposals were submitted to the Industry and Energy Ministry, the Natural Resources Ministry, and the Government of the Russian Federation.

Gazprom’s proposals include the development of a legal base aimed at the reinforcement of subsurface user responsibility in relation to APG utilization. In particular, this provides for the inclusion of APG utilization levels into license agreements, prohibition of hydrocarbon fields operation unless they are equipped with APG and natural gas extraction volume meters, growth of environmental penalties for above-norm emissions, inclusion of APG utilization activities into the package of project documentation for the fields under development, introduction of economic incentives at the state level promoting the efficient APG utilization. Among them are the abolition of state regulation of APG prices, equipment of flare devices with gas meters to record and monitor flared APG, introduction of profit tax benefits for APG derivatives sellers, as well as benefits for the manufacturing and import of gas fractioning equipment, abolition of the export duties imposed on propane-butane fractions produced by APG refining.