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13 Nov, 2008 04:36

Gazprom and BASF join forces to turn on Urengoy gas

Russian gas giant Gazprom, together with partner BASF, has tapped new supplies in the Urengoy gas field – the world’s second largest. Despite falling gas prices and a forecast drop in demand next year, the longer term outlook underlines the nee

The first gas is now flowing from the remote Achimov formation.  Achimov is part of Urengoy in Western Siberia- the largest gas field in Russia, with its gas in isolated pockets at a depth of 4 thousand meters.
Achimgaz is a 50/50 joint venture between  Germany's  BASF and Russia’s Gazprom.  BASF is investing $700 million in the first stage of the field's development, with Board Chairman Jurgen Hambrecht saying its an investment in future energy security.

“We are not only producing gas together, and participating in its sale, but also extracting it together with Gazprom. For Europe and Germany it means more secure gas supplies.”

This field is important not only for its output of 7 Billion cubic meters a year, but is also significant for its use of pioneering technology and international cooperation.  According to Gazprom Chairman, Alexey Miller further large scale projects are being considered.

“If we are talking about future projects – that means we will be working in increasingly remote areas. It would be a large scale project for West Siberia, involving a unified production and transportation system. This is still under discussion.”

With new reserves of gas increasingly hard to find, and Europe increasingly reliant on Russia as a supplier, such cooperation is a sign of things to come.  Achimgas is an example of successful international cooperation in Russia’s upstream sector – with BASF’s participation in Russian gas production resulting in Gazprom getting access to downstream markets in Germany.  As getting more gas to European markets becomes increasingly crucial over the longer term, this project is blazing a trail which other projects are sure to follow.