OREANDA-NEWS. April 02, 2010. Oil & gas company TNK-BP is not planning to enter the Russian electricity market as a major electricity producer, but is considering projects to build new generating sets for its own needs, and also to utilize associated gas from its fields.

Pavel Strunilin, TNK-BP Vice President for Power Supply, told journalists on Wednesday that one such project, by analogy with the joint construction with OGK-1 of a generating set at the Nizhnevartovsk power plant (Khanty-Mansiysk Autonomous District, KhMAO), could involve building a generating set in Orenburg region, where the company has several fields.

“We have gas resources in other regions too [other than KhMAO – IF]. You might say that some studies have been done in respect of Orenburg”, he said, adding that the project is currently in the discussion stages rather than concrete planning. 

Strunilin later explained that there could be a possibility of a 400—800 MW gas power station in Orenburg, based on the amount of associated gas earmarked for utilization. If transportation of the associated gas from the fields is constrained by the capacity of the gas transmission system TNK-BP would be interested in building a station of the appropriate size.

Orenburg, like KhMAO, is one of TNK-BP’s focus regions for production expansion. 

“If Orenburg was producing 15 mln tons [of oil – IF] in the early 2000s and the issue was whether it was worth working on this asset, production now stands at 22 [mln tons – IF] and there is great potential in Orenburg”, said Strunilin.

He also spoke of the need to develop electricity grid infrastructure to supply power to the fields, including in Orenburg. On Wednesday, TNK-BP signed a cooperation agreement with OJSC Holding MRSK, which owns power distribution assets in the RF. According to Strunilin, TNK-BP is now updating its long-range plans. Once these are finalized the Company will submit a proposal to Holding MRSK to build grid infrastructure. Asked about the possibility of major new power engineering projects together with other market players, Strunilin said: “All our programmes are about generating power on site for our own consumption. We’re not planning to be an energy company producing electricity in marketable quantities in order to be an operator on the electricity market.”

TNK-BP is currently building new generating sets with a total capacity of 700—900 MW at the Nizhnevartovsk power plant in a joint venture with OGK-1. The first set is scheduled for commissioning in the 2nd quarter of 2013, and the second in 2013—16. To deliver the project OGK-1 and TNK-BP have set up a joint venture in which the power company holds 75% minus 1 share and TNK-BP holds the remainder.

Under the agreement with OGK-1 TNK-BP is to supply gas for all three of the station’s generating units (it currently has two 800 MW units) on the basis of long-term contracts (at least 15 years). TNK-BP is currently supplying 3 bcm of gas per year to the two existing sets at the Nizhnevartovsk power plant. The new set is expected to consume an additional 1.2 bcm of gas.