Reduced flaring

Associated petroleum gas (hereinafter, APG) is pumped into formations to maintain formation pressure and to generate heat and electrical energy for in-house use by oil and gas producing organizations. It is also supplied to gas processing plants and the gas transportation systems of other organizations.

The Program for Rational APG Utilization has been in place at Russian LUKOIL Group entities since 2013. The program includes measures related to building new facilities and renovating continuously operating ones for the pre-treatment, transportation, and processing of APG.

In 2017, Russian LUKOIL Group entities achieved a goal of 95% APG efficient use. Thanks to the program measures, environmental conditions in the Company's main oil and gas extraction regions (West Siberia, Perm Territory, Volga Region, and Republic of Komi) are improving.

In 2016–2018, the volume of APG flaring fell by almost a factor of three, and by 57% in 2018 compared to 2017.

Our goal is to continue to increase the share of APG use by reducing the flaring of energy resources.


Total volume of APG (hydrocarbon) flaring, million cubic meters
2016 2017 2018
Total for LUKOIL Group, including: 952.5 574.9 328.4
Russian entities of LUKOIL Group 937.6 555.3 312.9
Foreign entities of LUKOIL Group 14.9 19.5 15.5

Notes. 1) Data on foreign entities are presented by LUKARCO B.V. (in accordance with the share in the Tengiz project in Kazakhstan) and LUKOIL Overseas Kumkol B.V. (in accordance with the share in the Kumkol project in Kazakhstan). 2) The rise in the 2017 volume of APG flaring in foreign entities was due to the maintenance of gas equipment in the Tengiz project.
Volume of APG utilization funding activities, RUB billion

Notes. Expenses related to the construction and renovation of facilities for APG pre-treatment, transportation, and processing, as well as for generating heat and electrical energy in Russia, are included. The decline was due to the completion of the main activities of the Program for the rational use of APG (for examples of events, see page 75 of the Annual Report for 2018.)


APG utilization level, %

Notes. Data on foreign entities are presented by LUKARCO B.V. in accordance with the share in the Tengiz project in Kazakhstan, and LUKOIL Overseas Kumkol B.V. in accordance with the share in the Kumkol project in Kazakhstan.

Plans

In 2018 the Program for Rational APG Use was updated for the period 2019–2021. The main program activities for 2019–2021 comprise:

LLC LUKOIL-Komi: renovation of the booster pump station DNS-V1 of the Usinskoye Oil Deposit and retooling of the Usa-Pechora main pipeline.

LLC LUKOIL-Perm: construction of production facilities at the Kokuy gas compressor plant and retooling of the Kueda Gas Compressor Plant.

LLC RITEK: construction of a multi-phase pipeline at the Galyanovsky license area.

LLC LUKOIL- Nizhnevolzhskneft: retooling of the production facility of the Yu. Korchagin offshore ice-resistant fixed platform (OIRFP), to boost hydrocarbon production.


"Zero Routine Flaring by 2030" initiative

The Company was one of the first Russian oil companies to join the World Bank's Zero Routine Flaring by 2030 initiative, which was announced in 2015 to pool the efforts of governments, oil companies, and non-government organizations to increase beneficial APG use. Two projects implemented by LUKOIL as part of this initiative are projected to reduce greenhouse gas emissions by around 105 thousand tons of СО2E.


Notes: The expected reduction is calculated for a period of three years (until the end of 2022).

Reducing gas leaks during repairs

We strive to minimize natural gas leaks into the atmosphere from scheduled repairs and equipment failures at oil and gas production facilities.

While detecting gas leaks, Russian LUKOIL Group entities are governed by regulatory documents, federal regulations, Russian oil and gas industry rules, and corporate standards. FZ-116 "On the Industrial Safety of Hazardous Production Facilities," FZ-22 "On Amending the Federal Law 'On the Industrial Safety of Hazardous Production Facilities,'" STO LUKOIL 1.19.1-2012, Federal Regulations and Rules "Rules for the Safe Operation of Infield Pipelines."

At production facilities, portable and stationary gas-leak control tools are used. Based on the results of audits and diagnostic work, repairs are scheduled for pipelines that transport gas and for gas collection and compression facilities (compressor stations). Equipment audits and diagnostic work are performed as scheduled.