PJSOC Bashneft and LLC Bashkir Generation Company (BGC), which forms part of Inter RAO Group, have renewed the Agreement on Obligations Related to Mutual Supply of Associated Gas and Heat, which they had concluded on December 31, 2014, until 2021. The value of the obligations under the Agreement is forecast to total about 20 billion roubles.

Under the Agreement until 2021, a heat supply contract has been extended; under the contract, branches of BGC (TPP-3 and TPP-4 in Ufa) will supply heat to Bashneft’s integrated refining complex. Guaranteed consumption volumes will total 2.5 million Gcal to 2.7 million Gcal per year.

In addition, the companies have extended a contract for the supply of associated gas from Bashneft’s fields in the Republic of Bashkortostan to BGC’s branches (TPP-4, the Kumertauskaya TPP and the Karmanovskaya TPP), which will use it as fuel. The guaranteed amount of gas consumption will range from 42.5 million cubic metres to 85.5 million cubic metres per year.

'Historically, oil and energy companies in Bashkortostan have been cooperating closely in the course of their operations,' emphasized Mikhail Stavskiy, Bashneft’s First Vice President for Upstream. 'The long-term agreement on mutual gas and heat supply will enable the companies to effectively implement investment programmes to upgrade their production capacities, including programmes aimed at reducing the negative environmental impact.'

The Agreement reflects an increase in heat consumption and gas supply related to the commissioning of a number of new technically complex process units forming part of the Company’s refining complex and implementation of Bashneft’s target gas programme aimed at increasing the associated gas utilization rate to 95%.

For instance, as part of the programme, between 2013 and 2015 the Company constructed and commissioned gas pipelines with a total length of about 170 kilometres and compressor stations making it possible to supply an additional amount of associated gas exceeding 40 million cubic metres from the Company’s fields in Bashkortostan to TPP-4 and the Karmanovskaya TPP.