Bloomberg News

Rosneft Plans Gas-to-Liquids Pilot Plant for Far East Fields

May 11, 2012

OAO Rosneft, Russia’s largest oil producer, plans to build a pilot plant in the country’s Far East to process natural gas pumped out alongside oil into liquids, according to a contractor with GTL technology.

The Moscow-based company plans to start a gas-to-liquids facility with capacity of 100 barrels a day at its Angarsk refinery in the eastern Irkutsk region in 2014, according to a filing from Oxford Catalysts Group Plc (OCG) today, which said its technology was selected for the project.

Rosneft is a minority partner in TNK-BP’s Far Eastern Verkhnechonsk oil venture and plans to tap the Yurubcheno- Takhomskoye deposits in the region, supplying crude to Asia via the East Siberia Pacific Ocean pipeline. There are no trunk networks to ship gas out of the region, making gas-to-liquids an alternative as producers seek to use the fuel.

“Right now oil producers re-inject gas into deposits to maintain pressure or use it to fuel power plants but GTL may make sense because of a deficit of petrol in the region,” Alexander Nazarov, an oil and gas analyst at OAO Gazprombank, said by telephone today.

GTL Plants

The Russian government wants oil producers to use 95 percent of the so-called associated gas, which is often burned off due to a lack of pipelines. Rosneft may be looking to GTL as it has lagged behind other companies in movement on meeting this goal, Nazarov said.

OAO Gazprom, Russia’s gas pipeline and export monopoly, has held back on major infrastructure and production projects in the Far East as negotiations to sell the fuel to China, the world’s biggest energy consumer, remain deadlocked over price.

Rosneft may build more GTL capacity to process the gas it produces alongside oil into either synthetic crude or products, including diesel, Oxford said. Rosneft is looking at building a GTL plant at its Novokuibyshevsk refinery in the Volga region to produce motor fuels by 2014, RBC Daily reported on March 15, citing an unidentified company official.

Rosneft spokesman Andrey Knutov didn’t respond to requests for comment on the statement.

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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