29 Jan 2024 15:05

Several companies and state structures interested in constructing underground oil storage in Russia - GKZ

NOVOSIBIRSK. Jan 29 (Interfax) - A number of companies and government agencies are showing interest in the construction of underground oil storage facilities, Head of the State Commission for Mineral Reserves (GKZ) Igor Shpurov told reporters in Novosibirsk on Monday.

"I know there is interest from both companies and some government agencies in underground oil storage, including for reserves, strategic reserves and so on," he said.

The need for storage depends on market capacity, current economic conditions, logistics, etc.

"This is determined by the authorities that plan the state reserve, or by companies, in each case differently," said the head of the State Reserves Committee, adding that in the United States the capacity of underground oil storage facilities is estimated at 100 million tonnes.

He recalled that the need for underground gas storage facilities was once actively discussed, but now "the need for these facilities is imperative."

"Everyone also understands that now, UGS facilities in Eastern Siberia need to be built," Shpurov said.

He also noted that the project to build an underground oil storage facility for Rosneft is unique.

"I think it will work," he said, noting that he could not comment on the company's production plans.

Earlier, the Rosnedra Central Commission approved Rosneft's project for Russia's first underground oil storage facility. Rosneft presented its project for three areas in Taimyr.

According to Rosgeolfond, Rosneft's Vostok Oil received licenses for an underground storage facility in November 2021. These licenses covered the Irkinsky, Payakhsky and Peschany subsoil areas in Taimyr (Krasnoyarsk Territory). In March 2023, there was an announcement on the Fedresurs site regarding the cancellation of these licenses. A few days later, Rosnedra issued licenses to companies Taimyrneftegaz and NGH-Nedra (part of Rosneft) for soil geolysis and assessment of the suitability of these same subsoil areas for the construction and operation of underground structures.

The creation of underground oil reserve storage facilities was actively discussed in 2020, when restrictions imposed in connection with the coronavirus led to a decrease in demand and a drop in oil prices. The discussion took a new turn in March 2022 due to the boycott of Russian crude oil. Previously, experts from the Russian Gas Society said that the optimal reserve volume is 10-20% of annual production (about 55-100 million tonnes based on oil production in 2019). According to their estimates, it takes 10-12 years to create storage facilities like these from scratch, but if you do it in areas where there are depleted deposits, it can be done within 3-5 years.