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Page added on July 17, 2016
Russia’s Arctic Oil Rush
High in the Arctic circle, three oil terminals on Russia’s northern coast are already exporting as much crude oil as Libya — and that flow could double in the next five years.
It’s a sign the development of remote deposits in the country’s harsh and fragile north will play an increasingly important role as conventional production in the historic West Siberian oil heartland continues to slide.
Two of the terminals provide outlets for crude from onshore fields in northern Russia that aren’t connected to the huge state-controlled pipeline system. The third sits atop Russia’s first offshore oil development in its Arctic waters.
Lukoil’s Varandey terminal, on the coast of the Barents Sea, started exporting crude in 2008 and has the capacity to handle 12 million tonnes of oil a year, equivalent to about 240,000 barrels a day.
That figures has never been reached as production from the Yuzhno-Khylchuyu oilfield, developed by Lukoil and Conoco, failed to deliver the volumes expected.
Oil production began at Gazprom Neft’s offshore Prirazlomnoye field in December 2013, with year-round exports starting in 2015. Output of the medium gravity, high sulfur crude now totals about 35,000 barrels a day, but should reach a peak of 110,000 barrels before 2020.
The newest of the three terminals, also owned by Gazprom Neft, is Arctic Gate, which was formally inaugurated by President Putin in May. Capable of handling as much as 170,000 barrels a day, the terminal is linked to the company’s Novoportovskoye field, where production of medium gravity, low sulfur crude is expected to rise to about 125,000 barrels a day by 2019 from 25,000 barrels today.
Combined, the three terminals handled a combined 230,000 barrels a day in the second quarter of 2016 and the flow has almost doubled from 130,000 barrels as recently as January last year.
By comparison, loadings from Libyan ports averaged about 240,000 barrels a day over the period, monthly ship tracking shows.
Russia’s Arctic cargoes are shipped as individual grades, preserving the unique qualities of each field’s oil, rather than being blended into one of Russia’s uniform export streams.
For Lukoil, this is an advantage. Most of the expected growth in exports will come from Trebs and Titov, two fields it’s developing with Bashneft. Their output is well suited to producing high-value transport fuels, so is likely to command a premium over Russia’s Urals Blend crude in the Atlantic Basin market, or ESPO crude in the Pacific.
The Trebs and Titov development is now producing about 45,000 barrels a day of light, sweet crude, with output expected to reach a peak of around 200,000 barrels a day by 2020.
The new oil fields feeding Russia’s Arctic terminals could be contributing as much as 425,000 barrels a day to Russian oil output by 2020. Other fields in the far north of the country are also expected to begin producing this year, but these will be tied into the country’s pipeline system.
Although this is only 4 percent of Russia’s total production of almost 11 million barrels a day, it will be vital to maintaining that level of output. Production from Russia’s giant fields in West Siberia, most of which were developed in the Soviet era, is firmly in decline and unlikely to reverse that trend.
As long as Russia is hampered by sanctions from exploring and developing the shale oil resources thought to lie beneath the West Siberian oil province, the fields it is developing in the Arctic will play a crucial role in its hydrocarbons future.
6 Comments on "Russia’s Arctic Oil Rush"
Apneaman on Sun, 17th Jul 2016 3:29 pm
MEGACANCER ~ Exploring the pathology of industrial civilization.
We Need More Growth!
“Bacteria behave similarly to humans, using the high Energy Return on Energy Invested (EROEI) energy sources first, because it allows the most rapid reproductive success in a specified time period. After the rich deposits are mined, the bacteria and humans will turn to the next most energy rich resource until either the energy is exhausted or it costs more to make the enzymes than the return from the metabolized energy source.”
“And in light of our impending demise, what are all of the bright and brilliant statesmen and politicians trying to do? Increase growth of course, right there on the stationary part of the curve where there is an overburden of technological cells and human RNA that can probably be counted in the hundreds of millions of cells and billions of human RNA. We may have wonderful libraries of tool schematics (DNA) and we work hard making tools to use in the environment (our petri dish), but we’re not “sapient”, we’re just an agglomeration of cells with a brain that is meant to simulate bacterial growth behavior on a different scale until, like the bacteria, we hit the wall.”
http://megacancer.com/2016/07/17/we-need-more-growth/
bug on Sun, 17th Jul 2016 4:39 pm
Ape, the pols and citizens all want more growth, endless growth , all the way to live like Star Trek. Problem is that if growth slows, stops, shrinks, our house of cards society collapses. Others here have said such. If this all collapses, nobody will be thrilled, but me.
Apneaman on Sun, 17th Jul 2016 5:00 pm
bug, you’re not alone in your thrill seeking. I’ve heard many commenters in the vast and mysterious DoomOsphere say the identical thing.
Doppeldoomers
regardingpo on Mon, 18th Jul 2016 5:09 am
Thanks for all your links Apneaman.
I think bug was making a joke about the fact that his name is bug when he said he’ll be the only one thrilled.
Davy on Mon, 18th Jul 2016 6:06 am
More “bad” climate news.
“Clouds of Denial Clear as Rising Storm Tops, Middle Latitude Drying Found to Speed Global Warming”
https://robertscribbler.com/
“In the past, scientists had hoped that changes in clouds would shelter the Earth from some of the greenhouse gas warming caused by fossil fuel emissions. What we are finding now is that the opposite is true. The way clouds change as the Earth warms appears to be increasing the intensity of greenhouse gas warming….In other words, the heat provided by human fossil fuel emissions is forcing the clouds to respond in ways that warm the Earth even faster.”
“In addition to these changes that add heat to the Earth System, there is one noted significant knock-on effect. Loss of clouds in the middle latitudes results in less rainfall for places like the Amazon Rainforest, the US Southwest, and large parts of Europe, Africa, Asia, and Australia. In this way, shifting storm tracks are an enabler not only to amplified global warming, but also to the increasingly prevalent and severe droughts and wildfires that we are now seeing in many of the most highly populated parts of the world.”
“Ramanthan notes in the Washington Post: “I consider this as the most singular of all the things that we have found, because many of us had been thinking the cloud changes might help us out, by having a strong feedback which is going the other way instead of amplifying it… The uncertainty is narrowing down. I used to say, if I made a 50 percent overestimation of the global warming, it was due to the clouds. But we are running out of that excuse now.”
rockman on Mon, 18th Jul 2016 10:01 pm
Speaking of drilling in the Arctic the Norwegians as well as the Russians are getting some new tools. BTW nether the price of oil today or in 5 or 7 years will have a bearing on new Arctic development that won’t come o line for 10+ years. Assuming, of course, there’s more to develop there.
Sembcorp Marine delivers Noble Lloyd Noble, the world’s largest jack-up rig, to Noble Corporation
Ultra high-specification harsh environment rig is also the first of its kind to fully comply with both Norwegian and UK regulatory standards
Singapore, July 16, 2016: Sembcorp Marine, a global leader in offshore and marine engineering solutions, has delivered the world’s largest jack-up rig to Noble Corporation.
Noble Lloyd Noble, the seventh ultra high-specification harsh environment jack-up rig successfully completed for Noble Corporation, is based on the GustoMSC CJ70 design as well as Statoil’s ‘Category J’ specifications.
The rig has an operational air gap of 69 metres and is capable of operating in a water depth of up to 150 metres (492 feet) in harsh environmental conditions. It boasts a maximum total drilling depth capacity of 10,000 metres (approximately 33,000 feet).
To be deployed in Statoil’s Mariner field development in the North Sea under a four-year charter arrangement, Noble Lloyd Noble is the first offshore structure of its kind to fully comply with both Norwegian and UK regulatory standards. It is uniquely suited for operation over a very large platform or in a subsea configuration.