First oil from Russian Arctic shelf loaded

18 April 2014, press release

Today Gazprom loaded the first cargo ofoil produced from the Prirazlomnoye field— the only Russian project for hydrocarbons development inthe Arctic shelf. Taking part inthe event were Alexey Miller, Chairman ofthe Gazprom Management Committee, heads ofthe Company’s specialized structural units and subsidiaries aswell ascontracting companies.

Mikhail Ulyanov oil vessel arrives atPrirazlomnaya toload oil from platform

The command tostart oil loading was given byRussian President Vladimir Putin.

The first oil cargo totaled 70thousand tons. Itwill bedelivered toconsumers inNorthwestern Europe byoil vessels Mikhail Ulyanov and Kirill Lavrov purposely built onGazprom’s request for shipping oil from the Prirazlomnoye field. All inall, itisplanned toship over 300 thousand tons ofoil from the field this year.

Itisthe first time that ARCO (Arctic Oil), the new type ofArctic oil produced from the Russian shelf entered the global market. Itwas purchased byone ofthe top European energy companies; the feedstock was sold under the direct contract. The new ARCO oil was traded among oil refining companies ofNorthwestern Europe inthe first quarter of2014. Once the production volume ofthe Prirazlomnoye field isincreased, apart offeedstock will besold under long-term contracts.

Preparing for oil loading

The Prirazlomnaya offshore ice-resistant stationary platform secures every process operation inthe field— oil drilling, production and storage, end product processing and loading. The platform design fully excludes any oil spills during production, storage and loading processes.

The produced oil isstored inthe caisson with three-meter-high concrete walls covered with two-layer corrosion- and wear-proof clad steel plate. The caisson isable tostore some 94thousand tons ofoil. Its safety margin greatly exceeds the actual loads. Inaddition, awet method ofoil storage isused atthe platform. The method eliminates the possibility ofoxygen getting inside the tanks and thus prevents the creation ofanexplosive environment.

During oil loading

Inorder topump the end products into oil vessels, special equipment was developed for direct oil loading. Toavoid accidental oil spills, the loading block system goes off inseven seconds atmost. The platform isequipped with two special complexes ofsuch akind, placed diagonally onthe opposite boards— southwestern and northeastern.

The loading point ischosen depending onacombination ofnatural factors— the sea surge, ice drift, currents, and wind. When anoil vessel goes beyond the sector serviced byone complex, the vessel isdisconnected and moved toanother facility. Inorder toexclude the incidental collision with the platform, oil vessels are equipped with dynamic positioning systems, which may anchor them despite the wind and wave loads.

“Gazprom has opened anew stage inthe development ofthe Russian oil industry. The first oil produced inthe Russian Arctic shelf, the first oil from the Prirazlomnoye field was loaded into the oil vessel tobedelivered toconsumers. From this moment the return onthe investments inPrirazlomnoye will start.

Today’s event ishighly important for strengthening Russia’s position inthe global oil market. Weincreased the flexibility and reliability ofoil supply toalmost any part ofthe world,” said Alexey Miller.

Presentation ofthe project “Prirazlomnoe” (video)

Russia Today (video)

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REFERENCE

The Prirazlomnoye oil field islocated inthe Pechora Sea, 60kilometers off the shore. The recoverable oil reserves amount to71.96 million tons, projected oil production comes uptosome 6million tons ayear (tobereached after 2020). OnDecember20, 2013 Gazprom started oil production inthe field from the Prirazlomnaya offshore ice-resistant stationary platform.

Prirazlomnaya isanunparalleled platform designed and constructed inRussia onGazprom’s request. Itisintended for operation under extreme environmental and climatic conditions, meets the most stringent safety requirements and can resist high ice loads.

Despite the platform iswell protected incase ofany emergencies, anelaborate set ofprotection measures were developed and set uptokeep the staff safe aswell asthe environment and the platform itself.

Particularly, inaccordance with the Russian law all the responsible authorities approved the Plan for preventing and eliminating oil spills.

Special-purpose ice-breakers Yury Topchev and Vladislav Strizhov are always oncall safeguarding the waters near Prirazlomnaya. Anemergency center islocated onshore (Varandey settlement, Nenets Autonomous Area) inthe closest distance tothe platform.

Particular attention ispaid toimmediate responses tooil spills. For instance, provision ismade for oil containment booms, high-capacity oil skimmers, outboard oil-in-ice skimmers, anoil-in-ice recovery bucket and other facilities.

Land and marine ecosystems are monitored inthe region and bio resources are recovered thanks tofish farm releases.

The project operator isGazprom Neft and the license holder isGazprom Neft Shelf (awholly-owned subsidiary ofGazprom).

Mikhail Ulyanov and Kirill Lavrov with adeadweight (cargo weight) of70thousand tons each are super ice-class (Arc6) double hulled oil vessels of ’double action’ (operating stern first inice).

Prirazlomnaya photo gallery