The Yukos Oil Company started refining and selling about a third of the natural gas it extracts with oil as Russia opens its gas market to oil companies that had been forced to burn their gas at the wellhead.
Russia's second largest producer of oil opened a $200 million gas processing plant in the Western Siberian region of Tomsk today. The plant will process one and a half billion cubic meters of gas a year, and already has contracts to supply local consumers.
While gas seeps out from many Siberian oil wells, Russian producers mostly burn the fuel because Gazprom, the world's biggest gas company, has blocked them from using its pipelines. Russia is reversing these policies to ensure domestic supplies, while allowing Gazprom to retain its monopoly on exports, which generate about eighty percent of the company's revenue.
“We need to boost oil production, so we must utilize the gas somehow; you just can't flare more than a certain amount of gas,” said Yuri Beilin, Yukos's president for exploration and production, at a press conference in Tomsk.