Surgutneftegas to Diversify Gas Production and Processing Op

Gas Gathering and Use Division of OJSC Surgutneftegas, the largest in the industry, operates on 38 fields of the Company in Western Siberia. During the eight months of 2004, the Division supplied 8.3 bcm of gas, including 5.6 bcm supplied to the Surgut power plants and about 2.7 bcm to Gas Processing Division. The output of oil products totaled over 54.3 thousand tons, including 25.9 thousand tons of asphaltic road oil, 20.1 thousand tons of diesel fuel, and 8.3 thousand tons of gasoline fraction.

Creation of the full production cycle to utilize and process associated petroleum gas and to sell market products was a major step in the Company's diversification. Gas Gathering and Use Division operates the Company's gas turbine power plants. In 2003, power output at gas turbine power plants located at Konitlorskoe and Muryaunskoe oil fields increased by 8% compared to the previous year reaching 312.3 mn kWh. This year the Company has already generated 260 mn kWh, including electricity produced by newly commissioned power plants.

A power plant at Lukyavinskoe oil field, which has been in operation since this July, is to utilize 91.2 mn cub meters of associated petroleum gas and produce 315.4 mn kWh of electric power a year. The Company's R&D Institute "SurgutNIPIneft" is the general designer of the new plant, which is constructed by Construction and Assembling Trust No. 1 of the Company.

This year the Company is planning to put into operation four more gas turbine power plants. Performance tests at power plants at Russkinskoe and Bittemskoe fields are almost over; construction and assembling works at one of the two plants in Lyantor are about to be completed, and the second plant there is going through the commissioning and start-up phase.

At present the Company is in the early stage of work to switch the gas transport facilities of the compressor station KS-41 at Fedorovskoe oil field from electrical drives to gas turbine drives.

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