Russia: Arctic oil enters global market

Gazprom on Friday loaded the first cargo of oil produced from the Prirazlomnoye field – the only Russian project for hydrocarbons development in the Arctic shelf.

Taking part in the event were Alexey Miller, Chairman of the Gazprom Management Committee, heads of the Company’s specialized structural units and subsidiaries as well as contracting companies.
The command to start oil loading was given by Russian President Vladimir Putin.

The first oil cargo totaled 70 thousand tons. It will be delivered to consumers in Northwestern Europe by oil vessels Mikhail Ulyanov and Kirill Lavrov purposely built on Gazprom’s request for shipping oil from the Prirazlomnoye field. All in all, it is planned to ship over 300 thousand tons of oil from the field this year.

It is the first time that ARCO (Arctic Oil), the new type of Arctic oil produced from the Russian shelf entered the global market. It was purchased by one of the top European energy companies; the feedstock was sold under the direct contract. The new ARCO oil was traded among oil refining companies of Northwestern Europe in the first quarter of 2014. Once the production volume of the Prirazlomnoye field is increased, a part of feedstock will be sold under long-term contracts.

The Prirazlomnaya offshore ice-resistant stationary platform secures every process operation in the field – oil drilling, production and storage, end product processing and loading. The platform design fully excludes any oil spills during production, storage and loading processes.

The produced oil is stored in the caisson with three-meter-high concrete walls covered with two-layer corrosion- and wear-proof clad steel plate. The caisson is able to store some 94 thousand tons of oil. Its safety margin greatly exceeds the actual loads. In addition, a wet method of oil storage is used at the platform. The method eliminates the possibility of oxygen getting inside the tanks and thus prevents the creation of an explosive environment.
In order to pump the end products into oil vessels, special equipment was developed for direct oil loading. To avoid accidental oil spills, the loading block system goes off in seven seconds at most. The platform is equipped with two special complexes of such a kind, placed diagonally on the opposite boards – southwestern and northeastern.

The loading point is chosen depending on a combination of natural factors – the sea surge, ice drift, currents, and wind. When an oil vessel goes beyond the sector serviced by one complex, the vessel is disconnected and moved to another facility. In order to exclude the incidental collision with the platform, oil vessels are equipped with dynamic positioning systems, which may anchor them despite the wind and wave loads.
“Gazprom has opened a new stage in the development of the Russian oil industry. The first oil produced in the Russian Arctic shelf, the first oil from the Prirazlomnoye field was loaded into the oil vessel to be delivered to consumers. From this moment the return on the investments in Prirazlomnoye will start.Today’s event is highly important for strengthening Russia’s position in the global oil market. We increased the flexibility and reliability of oil supply to almost any part of the world,” said Alexey Miller.

Background

The Prirazlomnoye oil field is located in the Pechora Sea, 60 kilometers off the shore. The recoverable oil reserves amount to 71.96 million tons, projected oil production comes up to some 6 million tons a year (to be reached after 2020). On December 20, 2013 Gazprom started oil production in the field from the Prirazlomnaya offshore ice-resistant stationary platform.

Source: Gazprom, April 22, 2014

 

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