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Lukoil to invest $22 billion in North Caspian Sea

Giant Filanovksi project to open Caspian Sea to Lukoil

In October Lukoil organized a welcome reception dedicated to the selected contractors for the Vladimir Filanovsky field development project in the north of the Caspian Sea.

With $3.5 billion capital expenditure, the Filanovsky project is strategic for Lukoil as it opens a $22 billion campaign of exploration and development in the Russian side of the Caspian Sea.

According to actual estimations, the Caspian Sea could become one of the most strategic oil and gas regions in the world as it may hold up to 100 billion tonnes of oil equivalent in crude oil, natural gas and condensate.

On the northern part of the Caspian Sea these reserves are estimated around 4.5 billion tonnes of oil equivalent.

In this context, Lukoil is targeting a plateau production out of the Caspian Sea of:

 – 6-8 million t/y (120,000 – 160,000 b/d) of crude oil

 – 10 billion cubic meter per annum (1 billion cf/d) of natural associated gas

The exploration and development of the Caspian Sea should concentrate 25% of the $100 billion capital expenditure planned by Lukoil over the decade 2011 to 2021.

Four interconnected platforms for the Filanovksi project

This program begins with the conversion into production phase of the Vladimir Filanovski offshore oil and natural gas field.

Discovered in 2005, the Filanovski holds:

 – 1.1 billion barrels (150 million tonnes) of recoverable reserves of crude oil

 – 1 trillion cubic feet (30 billion cubic meters) of recoverable reserves of natural gas.

To develop this field, the Filanovski project includes:

 – A first ice resistant fixed platform (IRFP1) to perform drilling and operate the wells

 – A central processing platform (CPP) to separate and treat oil and gas before piping them through the export pipeline

 – A risers block offshore fixed platform (RB) 

 – A living quarters module platform (LQM) for 125 crew members with helipad

 – Platforms connecting pipelines

 – Export pipeline

 – Onshore terminal

All these platforms shall be ice resistant, they will be connected by catwalks and supported by a fleet of 3 service vessels.

The riser block platform is to gather the oil and gas production coming from the Filanovski field and the satellite Yury Korchagin field, and then to export this oil and gas through pipelines.

The export pipeline will be 330 kilometers to connect the Filanovski oil and gas field to an onshore terminal.

This onshore oil and gas import terminal will have a storage capacity of 80,000 cubic meters.

This onshore terminal will then be connected for export to the Caspian Pipeline Consortium coming from the Tengiz field in Kazakhstan to the Port of Novorossiysk in Russia.

Lukoil selected contractors for Filanovksi project

For the offshore part of the Filanovski project, Lukoil awarded the engineering, procurement and construction (EPC) contracts to:

 – Obyedinyonnaya Sudostroitelnaya Korporatsiya (United Shipbuilding Corporation) for the drilling platform

 – Krasnye Barrikady shipyard for the riser block platform and the living quarters platform

 – Globalstroy Engineering for the oil and gas central processing platform

 – Bumi Armada Berhad for the platforms interconnecting pipelines and Yury Korchagin field tie-in

 – Saipem for the export pipeline

 – Saipem will also provide Lukoil with the transportation and installation of the four platforms to the production site

 – Palmali Shipping Services and Agency Co. LTD for the fleet of service vessels.

The two first platforms should be installed in 2014 for commercial operations in 2015.

In respect with the $22 billion capital expenditure planned by Lukoil in the north of the Caspian Sea, the purpose of the welcome reception for the selected contractors (Obyedinyonnaya Sudostroitelnaya Korporatsiya, Krasnye Barrikady, Globalstroy Engineering, Bumi Armada Berhad, Saipem and Palmali Shipping Services) is to realize how important it will be to deliver on time to allow Lukoil to move on the next steps of the Caspian Sea conquest.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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