MOL, Russneft JV to consider building power plant fueled by stranded gas

MTIeconews.hu

Budapest, July 20, 2009 (MTI-ECONEWS) - The board of ZMB, a joint venture of Hungarian oil and gas company MOL and Russian peer Russneft, will consider at a meeting on Monday building a power plant at the Zapadno-Malobalyk oil field to use otherwise stranded gas and prevent Russia's mining authority from withdrawing its licence for the area, Russian daily Kommersant reported.

The mining authority said two weeks earlier that it would withdraw the licence for the field if ZMB did not use at least 95pc of the gas released from oil wells at the site by 2016, as stipulated in the contract.

Russneft proposes building an RUB 800m 16MW power plant by the end of the year in order to save the licence for the field, Kommersant said. Last year some 68m cubic metres of gas was released as a byproduct of oil extraction at the field. This year, about 55m cubic metres is expected to be released.