Gazprom receives license for East Siberian Kovykta gas field

Russia's Gazprom has received the long-awaited exploration and production license for the major Kovykta gas field in East Siberia, the company said.
"The license is re-issued for Gazprom, in line with the decision of Rusia's Subsoil Agency," it said.

Gazprom bought assets of Rusia Petroleum, the former license holder of Kovykta, in March, during a bankruptcy auction, which gave it the right to receive the license.
Rusia Petroleum's parent company, Anglo-Russian TNK-BP, put up Rusia Petroleum for the auction following unsuccessful attempts to sell the asset since 2007, after Russian authorities threatened to withdraw the license on the grounds that the company had failed to meet license terms.

Under the license, gas production at the field was to reach 9 bn cmpy starting from 2008, but Kovykta's full-scale development has long been effectively blocked by a lack of pipeline access.
The field's ABC1+C2 reserves under Russian classification -- which roughly correspond to proven and probable reserves under international standards -- are estimated at 1.5 tcm of gas and 77 mm tons of condensate, according to Gazprom. TNK-BP previously put Kovykta's total reserves at 2.13 tcm.

Gazprom has said previously it does not expect the field's development before 2017 at the earliest. Peak production at the field is estimated at 40 bn cmpy.
Kovykta gas contains a high share of helium and Gazprom is considering the construction of petrochemical facilities, to which it could invite foreign investments. Previously, analysts had named Kovykta as a possible source for supplies to China.

Gazprom is aiming to agree on a gas price with China by the end of 2011 for a deal to supply 30 bn cmpy.
If the two sides sign an agreement by then, first gas deliveries could start in late 2015.