The 156 km long pipeline not only provides a new export route for Kharyaga operator Total and its partners Statoil, Zaruybezhneft and Nenets Oil Company. It also helps regional oil leader Lukoil add resources to its well-developed pipeline network in the region.
The new pipeline has a four million ton capacity and connects the Kharyaga field with Lukoil’s Yuzhno Khilchuyu field. From Yuzhno-Khilchuyu, the oil is taken further to the Varandey oil terminal on the Pechora Sea, from where it is shipped to western buyers through the Barents Sea, a press release from Lukoil informs.
For Lukoil, which has built the pipeline, the Kharyaga resources are vital for its operations in the region. The company in 2008 launched its Yuzhno-Khilchuyu field, as well as a connecting project pipeline and the Varandey sea terminal. The project, unique in its kind and one of the biggest in the company’s history, placed the company firmly in the lead in the strategically important region. It also made the company a major player in oil shipping in the Barents Sea.
However, the Yuzhno Khilchuyu project turned out to be major disappointment for the company. New studies showed that the field held far less resources than previuously estimated. While the originaly estimates indicated 500 million barrels of oil, the real numbers was later reduced to 142 million. Lukoil consequently reduced production at Yuzhno Khilchuyu from 6,9 million tons in 2009 to only 3,3 million in 2010.
Meanwhile, the annual capacity of the Varandey terminal is 12 million tons of oil.
The situation at Yuzhno Khilchuyu made Lukoil team up with other oil companies in the region, among them the Kharyaga partners. As previously reported by BarentsObserver, Lukoil also intends to team up with the operators of the Titov and Trebs field.
Through its new regional partnerships, Lukoil is further developing the pipeline grid in the Timan Pechora province. The result will be an increase in the volumes of oil shipped out from Varandey.
In a 2011 status report on oil transport from the Russian part of the Barents Region, the company Akvaplan-Niva demonstrated that the overall capacity of the terminals shipping oil and gas for export along the northern coast of Russia and Norway can reach 100 million tons in a five year perspective. If so, that is nearly ten times as much oil as in 2011.