LUKoil opens oil terminal in Leningrad region

LUKoil has officially announced that it has put into operation the first phase of the oil distributing complex LUKoil-2 in Vysotsk (the Leningrad region) built by the company to export oil and oil products. Russian Prime Minister Mikhail Fradkov declared at the opening ceremony that this project was an example of what happened when the interests of businesses met the interests of the state and corresponded to Russia's energy strategy. According to him, this project will broaden cooperation with foreign companies. Russian Federation Council Chairman Sergey Mironov, Presidential Envoy in the North West Federal District Ilya Klebanov and Leningrad regional governor Valery Serdyukov also participated in the ceremony.

The capacity of the first phase of the terminal is 4.7m tons per year. The terminal is expected to reach its full design capacity of about 12m tons in 2007. Investments in the first phase of the project were $225m. The resources were provided by the US investment fund HBK Fund for a 12-year period.

LUKOIL Overseas has started marine seismic studies under Tyub-Karagan and Atashsky projects, which are being implemented by the company on parity basis with the National oil and gas company of the Kazakhstan Republic KazMunaiGas, the Russia Journal reported. The works will continue until September this year. KazakhstanCaspianShelf is the tendered contractor. The total cost of field operations will exceed $4.2m.

Tyub-Karagan and Atashsky areas are located in the central part of the Kazakhstani sector of the Caspian Sea. Sea depths totals 7 to 35 meters. Tyub-Karagan has the area of 1,168 square km, and Atashsky - about 8,400 square km, the nearest sea port is Bautino. The main target of seismic survey is the clarification of geological structure and preparation of structures for exploration drilling. The scope of detailed 2D seismic at Tyub-Karagan is 655 km, at Atashsky - 1,057 km. The principal portion of search grid at Atashsky (over 1,000 km) will be processed in the deepwater zone.

The main seismic equipment used is the Gilawar research vessel. According to KazEcoProject Institute studies and results of the public environmental hearings in Aktau in April this year, the environmental impact of the seismic survey on the Caspian fauna will be minimal.

Forecast resources of Tyub-Karagan - 426.1m tons of fuel equivalent, including 324.3m tons of oil. Probability of hydrocarbons discovery is evaluated as high. Commercial discovery of hydrocarbons is possible in 2005. Production will start in 2012. Maximum annual production volume under the project - 7.2m tons, accumulative oil production (by the end of the contract term) - 110m tons, accumulative gas production - 19.1bn cubic meters. The number of extractive wells - 83, including 79 oil wells and 4 gas wells. Framework document - PSA with a 40-year term. Forecast resources of Atashsky - 248.8m tons of fuel equivalent, including 141.7m tons of oil. Framework document - exploration contract for 3 years with a 4-year extension option. In case of commercial oil discovery the contractor has the priority right for negotiations with Kazakhstani authorities on execution of a production contract.

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