1.5 Gazprom Group’s Contribution to National Industrial Development

PJSC Gazprom has a three-tier structure of innovations and R&D management. At the first tier, general management of innovation activities is performed under the guidance of the Board of Directors, the Management Committee and the Chairman of the Management Committee of PJSC Gazprom. The Chairman of the Management Committee also chairs the Research and Technology Board. The routine organization of innovative activities (the second tier) is entrusted to the Department that is in charge of long-term development. The third management tier includes subsidiaries and affiliates that may also develop and implement own Innovative Development Programs.

Seven KPIs were defined for evaluating efficiency of the PJSC Gazprom Innovative Development Program until 2025 implementation:

• Investments in R&D;
• Benefits from innovative technologies implementation;
• Energy resources saving;
• Improvement of environmental performance of the production process;
• Improvement of consumer properties of the products produced;
• Technological leadership level;
• Operations performance.

The target values were achieved for all KPIs in 2018.

During the reporting year, the total R&D investments amounted to RUB 9.0 billion. The economic benefits from using the R&D results were 37% higher than investments. Over 279 R&D results were implemented at the Group facilities.

In 2016–2018, 57 R&D results were implemented in exploration and prospecting, including development of the technique of electromagnetic probing of oil and gas deposits with ultra-short high-capacity pulses for studying anisotropic borehole environment; development of the complex technical requirements to software supporting fields discovery, exploration and development.

During the same period, 160 R&D results were implemented in gas production, e.g., development of domestic HF process liquids to be used at gas condensate and oil wells of Urengoyskoye OGCF, development of the technology for membrane separation of helium from natural gas in course of the Chayandinskoye OGCF resources development to produce helium concentrate and ensure its long-term storage in the producing formation.

In gas transportation and storage, 200 R&D results were implemented, including implementation of unique high-strength heavy-wall pipes (812.8-mm diameter, K65 strength grade to resist 300 atm. pressure, manufactured in Russia) in course of the TurkStream gas pipeline development; use of digital radio relay stations to be operated in harsh climate conditions in the Eastern Siberia; use of the smart monitoring system of pipeline electrochemical protection ensuring optimal management of the protection potential and reducing electric power consumption.

In processing, 23 R&D results were implemented, e.g. use of paraffin inhibitor to improve efficiency of gas condensate transportation, use of the comprehensive technical and technological solutions to increase Achimov gas condensate delivery to Urengoy Plant of Professional Cable Lines.

Innovative developments are implemented actively in the Gazprom Group’s oil business. For example, a unique tool was created for cognitive search for missed intervals: based on the outcomes of testing the created prototype, the tool’s and human projections matched in 80% of cases, although the speed of the cognitive tool is 600 times higher than speed of human work. At the Archinskoye field, the unbalanced drilling technology was applied for the first time. It allows to open a large number of natural fractures in the formation and improve performance of the wells. At the Novoportovskoye field, 20-stage HF without frac balls was introduced for the first time, and construction of the well with four horizontal cased wellbores was completed.

In electric energy business, digital modelling methods were applied during the project aimed at upgrading Т-250 power unit at CHPP-22 in Moscow to increase the efficiency of the individual steps of the new turbine generator set to 90%, and of the whole unit to 40% (in steam condensing mode).

In order to promote innovation activities and implement innovations in practice, PJSC Gazprom Science and Technology Prize Competition is held. The prize is awarded for large-scale developments in production, transportation, storage, processing and use of natural gas, gas condensate and crude oil that resulted in creation or improvement and efficient application of new machinery, devices, equipment and materials.

In 2018, 14 projects created by employees of 22 Gazprom subsidiaries and 9 third-party organizations were submitted to the Competition.

Implementation of the new digital technologies in Gazprom operations improves management efficiency and is one of the powerful tools for achieving the strategic goal of the Group.

The Gazprom Group’s Comprehensive Target Program for the Development of the Integrated Information Environment (IIE) for 2018–2022 was approved. The Program is based upon three fundamental principles: integration, innovation, imports substitution. Such approach could give momentum to developing the industrial complex using the components of the advanced enterprise management model (‘Industry 4.0’ concept).

Digital technologies are introduced in the Group business processes covering the following areas: models development and experimental research of the processes taking place in the natural environment; software development for geologic and geophysical data processing and interpretation. Those developments will facilitate building the virtual models of production facilities (digital twins) that will accelerate development of the new equipment samples, engineering and construction.

Digitalization and blockchain technology implementation pertain to gas supply process as well. A prototype of the technological platform automating the process for contracts conclusion, monitoring and performance was developed in collaboration with Gazprombank. That system also entails automatic arbitration and automatic calculation of gas payments. The system is open for all participants of the contractual process and it is fully protected against unauthorized intervention. The important driver of digital technologies development is the change of the Group operations culture and establishing of skilled, mobile, interchangeable cross-functional teams. That would ensure significant cost savings in course of the facilities operation, enable forecasting of all potential technical and technological complications, reduce human impact upon the environment and reduce the number of accidents.

In 2018, Gazprom Neft declared digital transformation of business the priority objective. The digital transformation stipulates a set of large-scale technological and organizational changes aimed at dramatic business performance improvement at all steps of the value chain: from the refinery to the sales facilities.

Gazprom Neft implements over 500 digital projects and initiatives. Implementation of the digital transformation strategy will enable Gazprom Neft by 2030 to reduce the duration and the cost of geologic exploration and field development 1.5 times, reduce the duration of major projects implementation by 40% and reduce the operating costs by 10%. Such technologies implementation could also help improve the industrial safety level significantly due to implementation of unmanned technologies in hazardous operational processes.

Gazprom Energoholding objective is performance improvement throughout the value chain: from generation to sale. In order to achieve this objective, artificial intelligence, digital twins, and technologies of automatic capturing of dispatch, process and commercial records shall be used.

Implementation of the digital automatic emissions control systems enables Gazprom Energoholding to control quantitative parameters of emissions in real-time mode and ensure their reduction.

Digital technologies application in general business results in substituting hard-copy documents with electronic ones in day-to-day activities and reduction of the number of manual transactions. For example, the key area of PJSC MOEK information technologies development is customer focus improvement as related to switching to interactive services. The company created new fully-functional interactive interface enabling the users to connect to the services, submit documents and perform other activities in online mode.

Gazprom Neftekhim Salavat aims to reduce costs and improve revenues by using advanced information technologies. This objective shall be achieved, in particular, by using:

• Digital twins to eliminate the “bottlenecks” and optimize heat and material flows;
• Planning and advanced process units management systems operating in almost real-time mode;
• Predictive analytics to improve equipment availability and reduce downtime.

In 2018, Gazprom Neftekhim Salavat implemented the automatic system for calculating actual losses at refineries. The software allows to establish actual losses while drawing the process material balance taking into account the instrumental error.

During the time of the system operation, it became possible to establish the places where imbalances occur and assess their size, which made it possible to make decisions regarding the change of the accounting schemes and methods. Data on actual losses were a part of the rationale of the decision to reduce the unit consumption at the refineries as related to losses.

In its operations, Gazprom uses domestic scientific and technological potential encouraging development of different Russian industries and manufacturing the products that have not been produced in Russia previously.

Import substitution activities cover the following:

• Implementation of import substitution projects using long-term agreements on full-scale production, supply, repair and maintenance of import substituting products against guaranteed supply volumes in the future years (“contracts for goods which will be created or acquired by the seller in the future”). As of the end of 2018, 10 such projects were in progress;
• The ‘Road Map’ for collaboration with constituent entities of the Russian Federation. The relevant documents were signed with 17 constituent entities of the Russian Federation. Three-partite ‘Road Maps’ (involving the regional administration and the Ministry of Industry and Trade of the Russian Federation) were developed and approved in the Voronezh Region, Perm Territory, Republic of Bashkortostan, Republic of Tatarstan, and Tomsk Region pertaining to PJSC Gazprom’s collaboration with industrial complexes of those regions.

According to the information provided by the centralized supplier Gazprom Komplektatsiya LLC, domestic products account for 99.4% of materials and equipment (M&E) procurement.

Gazprom pays a lot of attention to tubulars that account for the majority of M&E supplies. The unique conditions in which gas production, transportation and processing facilities are operated raise the requirements to performance characteristics of the pipes and connecting pieces. New types of tubulars are developed, put in production and approved for use in accordance with the effective scientific and technological collaboration programs for 2015–2020 agreed with the manufacturing companies (JSC United Metallurgical Company (OMK), PJSC Severstal, PAO TMK, PJSC Chelyabinsk Pipe Rolling Plant and JSC Zagorsk Pipe Plant). The domestic companies cover Gazprom demand for tubulars for future projects implementation and upgrading of the existing facilities in full.

The List of Critical Products is updated: the number of items where imports substitution is required was reduced from 486 to 253.

As part of import substitution, Gazprom Neft held over 120 tests of new domestic equipment samples and over 50 unique products were developed in 2013–2018. Approximately 170 samples are under development. The applications of the Russian development entities for external funding were supported for the total amount over RUB 6 billion, including the subsidies granted by the Industry Development Foundation.

In addition to implementation of domestic engineering solutions, Gazprom Energoholding works on reducing dependency of the generating companies from international suppliers of gas turbine equipment as related to its repair and maintenance.

Gazprom Neftekhim Salavat collaborates with the leading scientific and research entities, e.g. NTC Salavatnefteorgsintez LLC, the A.V. Topchiev Institute of Petrochemical Synthesis of the Russian Academy of Sciences, etc., in course of new technologies development. Collaboration between NTC Salavatnefteorgsintez LLC and the Boreskov Institute of Catalysis of the Russian Academy of Sciences (Novosibirsk) resulted in development of the new TMK-S catalyst system for ethylene bead polymerization under Hostalen technology at Monomer Plant. In 2018, the trial batch of TMK-S catalyst was produced, and the recorded operation was carried out at the operating facility.

Gazprom Neftekhim Salavat and the A.V.Topchiev Institute of Petrochemical Synthesis of the Russian Academy of Sciences also develop the technology and the catalyst for ethane dehydration. In 2018, the pilot batch of the dehydration catalyst was produced, and research was carried out using that catalyst. Based on their outcomes, the catalyst shall be patented and/or produced, and the feasibility study shall be carried out in respect of that technology.

In 2019, Gazprom recommends the domestic manufacturers to master the technologies for geological modelling and hydrocarbon reserves calculation, seismic exploration activities, automatic management of gas wells regimes, natural gas liquefaction, deep dehydration and acidic impurities scrubbing, offshore petroleum production, technological telecommunications.

In order to engage SME representatives in collaboration, the procurement procedures in which they may take part were simplified as much as possible:

• Procurement is carried out in electronic form;
• The minimal list of documents is required;
• No financial security of the bid is required.

In case of small-scale procurement (up to RUB 500,000) the ETP-GPB electronic service Small-scale Procurement Trading Portal is used. As of December 31, 2018, over 8,000 suppliers, including over 6,500 SMEs, placed their price lists there covering over 300,000 stock items.