A group of experts from Gazprom led by Alexander Ananenkov, Deputy Chairman of the Company’s Management Committee took a business trip to the Kemerovo Oblast. The group was made up of Vsevolod Cherepanov, Member of the Gazprom Management Committee – Head of the Gas, Gas Condensate and Oil Production Department, representatives of the Company’s specialized subdivisions and subsidiaries – Gazprom dobycha Kuznetsk and Gazprom promgaz.

Today Gazprom’s experts visited gas well facilities and comprehensive gas treatment units of the Kuzbass coalbed methane (CBM) project in the eastern part of the Taldinskoye field, exploratory well drilling sites in the Naryksko-Ostashkinskaya area as well as an automated CNG filling station supplied with CBM.

The Company’s experts led by Alexander Ananenkov together with Aman Tuleev, Governor of the Kemerovo Oblast and Sergey Shatirov, Member of the Federation Council of the Russian Federal Assembly, First Deputy Chairman of the Industrial Policy Committee under the Federation Council took part in the celebrations dedicated to the CBM-fueled reciprocating-engine power station (REPS) commissioning in the Taldinskoye field.

It is the second REPS in the Taldinskoye field. The first one was commissioned last December. The two stations made it possible to supply electric power not only to the Taldinsky coal strip mine, and the Zhernovskaya-1 and Zhernovskaya-3 mines being constructed, but to the Taldinskoye gas field facilities and the Naryksko-Ostashkinskaya area as well.

At the Taldinskoye field Alexander Ananenkov held a meeting dedicated to current execution of the innovative project on CBM production in the Kemerovo Oblast. Participating in the meeting were Vsevolod Cherepanov, Aman Tuleev and Sergey Shatirov.

In his opening speech Alexander Ananenkov noted that Gazprom was the first Russian company to start CBM production and to account for CBM reserves on its balance.

At present, the project is being implemented on schedule. In 2010 Gazprom produced 5.3 million cubic meters of CBM in a pilot operation mode. The gas is used to generate electric power and to refuel vehicles at the Taldinsky coal strip mine.

Seven exploratory wells have been drilled in the Taldinskoye field by now. Fourteen production wells will be constructed and the Taldinskoye field commercial operation will be started at the next stage of the project. Construction of 10 exploratory wells is nearly completed in the Naryksko-Ostashkinskaya area, another prospect of Kuzbass.

Alexander Ananenkov stressed the necessity of state support for the innovative project on CBM production which is of crucial importance not only for Gazprom. He noted that CBM will become the major component of the Kemerovo Oblast energy mix in the medium term. Early gas extraction from coal seams will not only make their further development secure but save costs due to elimination of coal mine degassing from the production process.

Aman Tuleev, Governor of the Kemerovo Oblast noted that CBM production is one of the most important projects for the Kemerovo Oblast – the country’s major coal producing region – and expressed his gratitude to Gazprom for organizing large-scale work in this area.

Based on the meeting results, specialized subdivisions of Gazprom and the Kemerovo Oblast Government were tasked to timely implement the Kuzbass CBM project.

Background:

Gazprom takes an active part in the innovative project on CBM production in Kuzbass as part of the assignments by the Russian Federation President.

In 2005 Gazprom created a research and testing site at the Taldinskoye field (C1 +C2 gas reserves account for 45.8 billion cubic meters) in order to develop the CBM production technology. The researchers from Gazprom promgaz created Russia’s first CBM technology there. 31 international and Russian patents were received across the entire process cycle from CBM exploration to utilization. Two-thirds of the equipment items used during the pilot project execution were manufactured in Russia.

In 2009 pilot operation of seven exploratory wells was started at the first pilot production area of the Taldinskoye field. Gazprom dobycha Kuznetsk, a wholly-owned subsidiary of Gazprom, is the license owner.

In February 2010 Gazprom launched Russia’s first CBM production project in the Taldinskoye field. Russian President Dmitry Medvedev took part in the launch ceremony.

Annual CBM production in Kuzbass is planned to reach some 4 billion cubic meters with a subsequent increase to 18–21 billion cubic meters in the long term in order to meet gas demand in other Western Siberia’s southern regions.

In May 2010 Gazprom submitted proposals to the Russian Federation Government on the measures to boost CBM production. According to Gazprom, a top-priority measure was to categorize CBM as a new kind of natural resource.

Tax incentives in the form of a zero tax rate for this natural resource production could become the next stage of the regulatory framework improvement and the basic means of state support.