Yamal LNG Project, Sabetta, Russian Federation

Yamal liquefied natural gas (LNG) project includes the development of the South Tambey (Tambeyskoye) gas field, located near Sabetta in the Yamal peninsula in Russia. The Russian Government has declared the project to be of national interest.

The project is being developed in three phases. The first phase is expected to be operational in late 2016, the second phase will be carried out in 2013-17 and the third phase in 2014-18. An investment of $15bn to $20bn is expected to be made in the project.

Novatek is executing the project through its subsidiary Yamal LNG. It holds 80% interest in the project, while Total holds the remaining 20%. Total became a partner in the project in October 2011. Novatek has signed an agreement with Gazprom for distribution of the LNG produced.

Several other companies such as Electricité de France (EDF) are expected to join the project. Novatek, however, will retain a minimum equity of 51% in case new partners enter the project. Final decision about the new partners is expected to be announced by the end of 2012.

Challenges associated with the LNG project site geology

Yamal peninsula is estimated to hold the largest gas reserves in the world. The region, however, has the toughest working conditions. The land is boggy, making drilling operations a challenge. In the winter season, daylight is available only for a short period during which the majority of the operations need to be carried out.

In addition, the area is very remote, with no local workforce available. The nearest potential market is also located 3,000km away.

Despite these challenges, several companies are investing in the region to recover the large gas reserves. Novatek and Total are developing another project named Shtokman in the same region.

Reserves of the South Tambey (Tambeyskoye) onshore gas field

The South Tambey field was discovered in 1974. In 2010, 2D seismic studies were carried out at the field to understand the geological properties. The field contains 72 commercially viable gas layers, of which 33 are shallow dry gas layers and 28 are deeper gas layers. The depth of these layers varies from 900m to 2,850m.

Estimated reserves of the field stand at 44 trillion cubic feet (tcf) of gas and 550 million barrels of condensate. The proven reserves stand at 1.26tcf of gas and 51.6mt of gas condensate.

Infrastructure for the Yamal liquefied natural gas (LNG) project

The Yamal LNG project includes the construction of an LNG plant, a processing facility for gas and condensate treatment, a gas transmission pipeline, well sites, a gas gathering system, a sea port at Sabetta and a fleet of tankers for transportation of the LNG.

The LNG processing plant will have a capacity of 15.5mt/y of gas and 1mt/y of condensate. It will include three LNG trains, storage and loading facilities.

Due to the extreme climatic conditions in the region, construction of the plant is planned to be carried out through modular methods.

Erection of the facilities for field development presents some challenges due to the permafrost conditions in the region. Due to permafrost, the underground layer of soil stays frozen for at least two years. The layer above it freezes and thaws with change in season.

As a result, the infrastructure cannot come in contact with this soil to ensure stability. In such conditions, the infrastructure is usually erected on stilts. A liquefaction technology suitable for these conditions will be chosen for the LNG plant.

The LNG loading / unloading tankers will have a deadweight of between 183,000t and 208,000t. They will be of ice-class and be able to operate in the harsh climatic conditions of the Yamal peninsula. Conceptual projection of the tankers is currently being carried out.

As many as ten tankers are expected to be built for the project. The tankers will help in transporting the LNG to markets in Europe, North America and Asia-Pacific region.

The Front End Engineering and Design (FEED) of the project is expected to be completed in the first half of 2012. Final investment decision is expected to be made in 2013.

Contractors for the Russian 'national interest' onshore gas project

Chicago Bridge and Iron Lummus (CBI Lummus) was contracted to carry out the pre-FEED study for the project. It is also carrying out the FEED study for the project.

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