Kovykta – with reserves of almost 2 trillion cubic meters of gas (70 Tcf) and more than 83 million tons (520 million barrels) of condensate – would pose huge infrastructure and transportation problems to any operator. Eastern Siberia is not nearly as developed as western Siberia, where most of the fields have good roads, power networks, and export pipelines. At Kovykta, little, if any, of that infrastructure is available. During the summer months, the terrain around the field is all swampland. Supply routes for equipment mobilization and drilling support are built in the winter and all major re-supply work must be done between mid-November and April, when the swamp surface is frozen.

But the Irkutsk plan was not possible without Gazprom’s cooperation – cooperation that TNK-BP never received. Further, the need for the Irkutsk gasification project infrastructure is minor compared to that for long-distance export pipelines. Kovykta is also intended to satisfy demand from China and South Korea. The Russian government has agreed to export 20 billion cubic meters (700 Bcf) per year to China and another 10 billion cubic meters (350 Bcf) per year to South Korea. Both countries are willing to pay premium prices for Kovykta gas, and that makes it a very enticing prospect for Gazprom. That said, Gazprom cannot develop Kovykta without a huge new pipeline construction effort. Now that TNK will become part of Gazprom, we expect those pipelines to finally be built.