Total to Take FID on Caspian Absheron 'End 2017'

Total is to take its final investment decision (FID) on development of the Absheron gas field, in the Azeri sector of the Caspian Sea, by the end of this year, the French company's senior vice president for Europe and central Asia, Michael Borrell, told delegates at the IP Week conference February 22.

The first development well will be drilled at the end of this year, he said. Production would be about 150mn ft³/day, or about 1.5bn m³/yr, for delivery to the local market, although the 350bn m³ field is capable of producing more. There is also condensate. While Total has held discussions with the government about allowing exports, these have not produced a result, Borrell told NGW, so the company is focusing on the $1bn first phase only.

Reflecting the difficult geology of the Caspian, the first well drilled into the reservoir in the 1990s found nothing commercial and the operator Chevron relinquished it. Under a new production-sharing agreement in 2009, Total drilled a second well, 5 km away and the other side of a fault, and that was successful, he told delegates.

Subject to a FID this year on Absheron, first gas could be produced as early as 2019, said Borrell.

He also spoke about the 16.6mn mt/yr Yamal LNG, in which it is a 20% direct stake holder and a 12% stakeholder through its 20% stake in Novatek. When the Russian company was hit by sanctions the project depended on Chinese and Russian lenders for financing.

The first cargo is to load in the second half of this year, and the second and third trains will come on stream in succeeding years. The first tanker in the dedicated fleet, named Christophe de Margerie after the former Russophile CEO of Total, is undergoing ice testing now and can go at 18.5 knots through water and 5.5 knots through ice, he said.

Construction work at Yamal LNG

(Credit: Novatek)

The cargoes will mainly go to Asia but in winter they will go Zeebrugge either for offloading into a storage tank or directly on to standard, cheaper tankers. He said that the project had higher transportation costs than other projects but it was still profitable.

Total is not directly involved in the other LNG project in Yamal, called Arctic LNG, which is also operated by Novatek but which will use different gas reservoirs and has yet to take any investment decision. Novatek is working on ways to lower the engineering costs, such as using a gravity base system, rather than sinking the thousands of heat-insulated piles that support the Yamal LNG project. Borrell told NGW that Total was focusing on Yamal LNG first, and waiting to get that going, before thinking about Arctic LNG.

Novatek finance chief Mark Gyetvay said last month in Vienna his company hopes to take final investment decision this year on the Arctic LNG project.

Borrell told IP Week delegates that while sanctions had also frozen its Bazhenov shale oil production project, the company "intended to stay and invest in Russia," and discounted the implications of the sale of its stake in Kharyaga. It just made more sense to have Zarubezhneft operating it, he said.

William Powell