Gazprom (RTS: GAZP) has postponed the implementation of its project to create the Bereznikovskoye underground gas storage facility in rock salt formations, a gas industry source told Interfax.
"Uncertainty has arisen there as to where precisely to place the caverns, and where Uralkali (RTS: URKA) wants to develop production. There are also problems with failure of the rock. All of this has resulted in the project being transferred to the deferred list," he said.
Russia's underground storage facilities are almost completely located in depleted fields and water beds. They can possess large volumes but low flexibility. Gazprom has placed its bets on developing storage facilities in salt caverns - they are flexible and highly productive. Two salt underground gas storage facilities are already being built in Russia: one in Kaliningrad and another in Volgograd. At the end of last year, Gazprom secured an exploration license to create the Novomoskovskoye underground gas storage facility in rock salt formations.
Technology for washing out salt caverns is not new to the Russian gas industry - such underground storage facilities were constructed during Soviet times, but after the collapse of the USSR, they ended up outside of Russia's borders, in Belarus and Armenia.
The Bereznikov area is home to the Verkhnekamskoye potassium and magnesium salt deposit, at which Uralkali currently conducts production operations. EuroChem and Russian mineral fertilizer producer Acron Group (RTS: AKRN) plan to develop their own sections.
An accident occurred at Uralkali's mine in October 2006 - at one of the mine's sections, there was an increased inflow of brine. In July 2007, a sinkhole occurred at the area. The second sinkhole occurred in 2010 near the Berezniki train station. It took until November 2011 to fill in this sinkhole. The third case of soil subsidence in the Berezniki area occurred in December 2011 near one of the unused buildings at the Berezniki mine construction division.
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(Originally published June 4, 2012, in Russia & CIS Business and Financial Newswire.)