Investing in Nature

Oleg NikolaenkoInterview with Oleg Nikolaenko, Head of Occupational Safety, Gazprom Neft

“Oil Russia” Magazine

New technology enables OAO Gazprom Neft to reduce environmental and economic risks.

Rational exploitation of mineral resources enables Gazprom Neft to not only minimise its impact on the environment, but also to improve the economic efficiency of its activities. Oleg NIKOLAENKO, the head of the company’s Department of Occupational Safety, spoke to “Oil Russia” magazine about key measures aimed at ensuring the protection of nature throughout the realisation of the company’s oil and gas projects.

— Mr Nikolaenko, what are the main focus points of Gazprom Neft’s environmental strategy?

— The strategy was developed during the formation of the company, during the development of basic corporate documentation in the field of industrial health, safety and environment (HSC), entitled “Gazprom Neft occupational safety policy”. Within this document the main principles, objectives and obligations of the holding in this field were defined. Our priority is ensuring the compliance of VINK activities with applicable environmental laws. The company strives to take advantage of all available cost-effective opportunities to reduce environmental and economic risks in excess of these requirements.

Gazprom Neft is constantly improving its system of management in the field of environmental protection. The measures taken by the company are aimed at improving the quality of production, identifying hazards, and comprehensive assessment and management of environmental and economic risks. This reduces the rate of negative environmental impact, as well as ensuring the implementation of global best practices in the areas of engineering, technology and management.

We strive to engage each and every employee of Gazprom Neft Group in this activity, as well as to ensure transparency through the sharing of information and dialogue with all interested parties.

— How much investment does the company dedicate to achieving these objectives?

— With the growth of the business, Gazprom Neft increases its investment in programmes to protect the environment. In 2007 we dedicated around 600 million roubles to this purpose, and by 2010 this figure had increased more than fourfold. These sums have been used for rehabilitation of territories, the organisation of waste processing and disposal, ecological monitoring of the environment, training and development of specialists and much more. Gazprom Neft’s various enterprises are constantly working to reduce emissions of pollutants into the atmosphere, water consumption and waste, and minimise negative impacts on sensitive ecosystems.

As well as this, a large number of projects are underway devoted to the reconstruction of production facilities: isomerisation, hydrotreatment of fuel at oil refineries, pipeline systems at production departments, etc. The cost of these projects is not classified under our accounting system as relating to environmental protection, but their implementation also leads to improved environmental conditions.

— Can you please provide specific examples of measures taken to ensure environmental safety in the production process?

— As an example, Gazprom Neft builds special landfill sites for the disposal of waste created during production. In 2010 we began construction of such facilities at the Shinginskoye and Urmanskoye deposits and at the south-western part of the Krapivinskoye deposit (operated by Gazprom Neft East). In the southern part of the Priobskoye deposit (Gazprom Neft Khantos) we conducted a reconstruction of the existing landfill for industrial and solid waste.

We also implemented the “oily waste processing programme”, which facilitated the removal (by the thermal method) of over 8000 tonnes of oily waste in 2010.

Of course, the company pays great attention to environmental issues during the construction of new facilities. For example, during the construction of offshore platforms located in water protection zones, the company employed eco-friendly pitless drilling methods. This technology reduces the amount of waste by separating the liquid phase, which is cleaned in special installations without the use of slurry pits. In this case the water re-use cycle becomes closed, reducing the capacitive park. In addition a special poison control system was organised. As a result the environmental protection requirements are not violated during construction and operation of pits, and pollutants do not filter into the underlying layers.

— What steps does the company take to reduce damage to the environment during the production and transportation of oil?

— It’s no secret that during production oil companies produce large areas of disturbed land, through roads, communication lines and slurry pits. It is therefore necessary to recultivate these areas and return them to land circulation. With this in mind, Gazprom Neft carries out a large range of activities, including taking an inventory of damaged land, assessing the contamination level in soil, developing documentation and selecting the most effective technology for remediation, as well as carrying out follow-up examinations involving independent experts. Throughout this process advanced techniques are applied and the most modern chemical and biological agents are used. In addition, perennials are specially planted.

One of the main contributors to environmental pollution is pipeline accidents due to metal corrosion. OAO Gazprom Neft currently utilises about 8000km of oil pipelines, and specialists are seeking ways to prevent this corrosion. A strategic decision was made to radically alter the approach to pipeline security and direct all attention not to eliminating the consequences of failure, but to maintaining technically competent service. Reducing the impact of hazards on these manufacturing facilities increases their service life three- or fourfold and prevents damage to the environment.

We have developed a target programme to improve the reliability of our pipelines, which will be in force for ten years. It is aimed at keeping track of the status of the pipelines and replacing their most vulnerable parts, increasing the resistance of new pipelines to environmental factors and reducing said factors’ aggression using chemicals.

Our company is testing and implementing new materials and technologies, involving collaboration with reputable scientific organisations. In recent years more than a dozen samples of new steel grades have undergone full-scale testing. Preliminary results generally confirm the potential of this direction and, equally importantly, make it possible to carry out a detailed search of necessary parameters, rather than simply iterate through the proposed range.

No matter how promising the results may seem, steel is still inherently susceptible to corrosion. However, there is an alternative — polymers. The application of polymer coating and polyethylene lining protects the steel pipe from aggressive environmental factors. Other methods involve the direct use of polymers as structural materials for the construction of pipelines. In order to endow the plastic and polyethylene with the necessary mechanical properties they are reinforced with fibreglass and steel wire frames, which are completely isolated from contact with corrosive material.

Gazprom Neft has been employing polyethylene-lined pipeline technology for two years. Flexible polymer-metal tubes are used in the flow lines of wells. For some time the company has also been using fibreglass-reinforced pipes (to transport water for injection into the reservoir). Due to fibreglass’ inherent resistance to corrosion the material can be seen as ideal; however, its fragility makes it far from universally useable. The trial operation was invaluable in terms of identifying sites where fibreglass piping can reliably solve the problem of corrosion.

— What steps are being taken by Gazprom Neft to minimise the combustion of associated petroleum gas?

— We implemented the “gas programme” with the goal of increasing the Group’s APG utilisation to 95%. In 2010 OAO Gazprom Neft became the first company of its kind to undertake, together with the Japanese companies Mitsubishi Corporation and Nippon Oil Corporation, a Joint Implementation (JI) project, in accordance with the rules of the Kyoto Protocol. This involves the planned utilisation of APG, previously burned on the Ety-Pur oil field, and the subsequent sale of emission reduction units (ERUs). It is expected to provide 3.1 million ERUs, each unit corresponding to one tonne of CO2.

— Could you please tell us about your environmental projects in the downstream sector?

— We have implemented a large number of projects in this area. In particular we are improving our technological processes through the use of advanced catalysts. We are constructing new facilities that rely on waste-free and low-waste technology, whilst simultaneously decommissioning physically and morally outdated facilities. The company is implementing innovative technology for the treatment of gaseous emissions and wasted water, as well as the disposal of generated and accumulated industrial waste. Of course, much attention is being paid to the environmental education of our employees.

A large-scale modernisation programme is underway at our oil refineries, aimed at improving the ecological characteristics of manufactured fuels and reducing emissions. In late 2009 at the Omsk refinery we completed the modernisation of diesel fuel hydrotreatment installation L-24/6, which, following the restoration of its two-stream technological scheme, is capable of purifying both summer and winter diesel fuel up to Euro-3 and Euro-4 standards. In October 2010 at the same facility we commissioned Russia and Europe’s largest isomerisation complex for light gasoline fractions (Isomalk-2). It enables the production of the high-octane component of commercial petrol with zero sulphur content and aromatic and unsaturated hydrocarbons. Thanks to the Isomalk-2 complex the processing depth of raw materials and the production of large volumes of motor fuel will increase.

Right now at the Omsk facility we are planning to update reservoir parks at the commodity bases. New reservoirs will be equipped with modern aluminium pontoons, through which the emission of hydrocarbons into the atmosphere will be reduced, as will irrecoverable production losses. Meanwhile the modernisation programme at the Moscow facility involves the reconstruction of existing processing facilities and the construction of new ones, an increase in safety and, just as importantly, environmentally friendly manufacturing processes. In 2010 we began construction of an installation for isomerisation of light naphtha, which will produce a component of petrol with an octane rating of up to 90.5 points.

Last year the Pancevo oil refinery in Serbia saw the construction of a hydrocracking and hydrotreatment complex. Its opening, scheduled for 2012, will increase processing volumes and produce more environmentally friendly fuels with low sulphur content.

Today a serious problem still faces oil companies: the disposal of oil sludge waste, in which the hydrocarbon content does not exceed 15-30%. The Moscow refinery already has a lot of experience with processing these substances: in 2003 it pioneered the use of innovative biological technology. At this time the combined area of the three sites set aside for this purpose is 2 hectares, which enables the neutralisation of up to 6000 m3 of waste per year.

— Would you please tell us about the company’s plans, projects and goals in the environmental field?

— The development strategy of OAO Gazprom Neft envisages serious expansion in the scale and geography of the business: acquisition of assets, development of new regions of Russia, the CIS and Europe, the implementation of overseas production and processing projects. This, of course, requires us to improve our environmental and economic efficiency, and reduce our negative impact on the environment through the use of global best practices.

Naturally, we will continue to collaborate with our partners. Thus, in planning the development of the south-east Barents Sea, Gazprom Neft has been cooperating with the World Wildlife Fund (WWF) and specialised institutes. The result of our collaboration was a comprehensive assessment of the ecosystem and marine mammal populations of the Pechora Sea. We have identified the main human factors that affect the vulnerable species of marine mammals, and have prepared proposals with a view to minimise adverse effects. We fully intend to continue this work.