Written by 5:30 pm EU Investment

Gazprom Reports Record High Production At Kirinskoye Natural Gas Field

Gazprom’s Kirinskoye gas condensate field that was launched nine years ago on the Sakhalin shelf has set a new level of production this quarter, Gazprom Dobycha Shelf Yuzhno-Sakhalinsk General Director Valery Guryanov has revealed. 

Summer and fall, while the weather and field operating conditions allowed, the company worked to continue infrastructure development and modification of the Kirinskoye field. This has already yielded significant results. We reached a record high for daily production in October, approaching figures of 9.3 million cubic meters of gas,” Guryanov said.

That’s a big jump considering that the field only managed to produce 0.782 mcm in 2020 and 1.2 mcm in 2021. Kirinskoye is the first field in Russia where production is carried out from an underwater production complex. The planned production plateau is 5.5 billion cubic meters of gas per year.

Last week, the leading Russian news agency TASS reported that Gazprom’s board had approved a record spending of 2.3 trillion rubles ($33.1 bln) for the coming year.

The Board of Directors approved the investment program and the budget of Gazprom for 2023. Investment program indicators did not check if compared to the version approved by the Executive Committee of Gazprom in November of this year. Funding of the investment program for 2023 will total 2.3 trillion rubles,” the company has said. Gazprom is the world’s largest natural gas producer with more than 18 trillion cubic feet in 2021.

It is, however, going to be interesting to see how Gazprom will cope with the recently installed natural gas price cap. After initially hitting a dead-end amid deep divisions, EU ministers have finally reached an agreement to implement a  gas price cap of €180/MWh, far lower than the €275/MWh trigger originally suggested by the European Commission. Under the current proposal, the EU price cap would not fall below €188/MWh, even in the event that the LNG reference price falls far lower. However, the EU gas price cap would move with the LNG reference price if it increased to higher levels, remaining €35/MWh above the LNG price. This system is designed to ensure the bloc can bid above market prices in order to attract gas supplies in tight markets. 

By Charles Kennedy for Oilprice.com

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