Novatek has launched the second stage of Phase Two development at its wholly-owned Yurkharovskoye field, providing the Company with the potential to increase annual productive capacity at the field by seven billion cubic meters (bcm) of natural gas and approximately 600 thousand tons of unstable gas condensate.
The Company completed the first stage of Phase Two development in September 2008 and is able to transport up to 34 bcm of natural gas from the field per annum. Novatek has continued to invest capital to expand the field's productive capacity, and as part of the second stage development, the Company launched two additional processing trains for separating natural gas, enabling the field to reach annual natural gas and gas condensate production volumes of 23 bcm and two million tons, respectively. With the launch of the second stage, Novatek has the productive capacity to produce up to 44 bcm of natural gas per annum.
According to Novatek's CEO, Leonid Mikhelson, "Our continued investment in the Yurkharovskoye field allows us the flexibility to increase hydrocarbon production from gas condensate layers in order to optimize the mix of natural gas and gas condensate production from our fields, thus maximizing our revenue streams from stable gas condensate and liquefied petroleum gas sales."
The Yurkharovskoye field is located within the Polar Circle southeast of the Tazovsky peninsula. The field is licensed to our wholly-owned subsidiary OOO Novatek-Yurkharovneftegas, and has been producing natural gas and gas condensate since 2003. The field's proven (SEC) reserves amount to 343 bcm of natural gas and 17 million tons of liquid hydrocarbons. In 2008, the field produced 11.71 bcm of natural gas and 895 thousand tons of gas condensate. The Yurkharovskoye field is the largest of Novatek's core fields in terms of reserves and the cornerstone of mid-term strategy of production growing.
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