Lodamun

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Neftkomp diversifies to CNG as Green Compact forces market changes in Lodamun

Neftkomp, the Nadiyan-based subsidiary of North Seleyan Petroleum, diversifies its operations to include compressed natural gas as tariffs and trade restrictions connected to the Green Compact halt production and export of crude oil and natural gas to Lodamun.

ⓘ: A natural gas liquefaction plant in Nadiya, owned by Neftkomp

In a press statement issued earlier this week, Neftkomp, the Nadiyan-based subsidiary of North Seleyan Petroleum (NSP), announced its plans to diversify its operations into compressed natural gas (CNG), with the intent of exporting the energy source to the Lodamese market. The announcement comes amidst the Hartman Administration’s sweeping tariff regime on imported fossil fuels, a centrepiece of the Lodamese Government’s green transition framework, aimed at “speeding up” the process for businesses and entities that seem incapable of seeing the writing on the wall. For better half of five decades, Neftkomp’s business model operated, partly around shipping both raw crude oil and refined petrochemicals to Lodamun. Amidst the rise of the Green Compact and the Federal Government’s otherwise aggressive “national security”-led lean towards renewable energy, the company’s approach seemed untenable. Citing “structural change to the Lodamese energy landscape,” the company confirmed that shipments to Lodamun would cease and will not resume under the current tariff structure. Yet, both Neftkomp and its parent company, NSP, insist that they will not shutter their upstream oil and gas operations in Trigunia as a result of the Green Compact or the Harrington Company’s tariffs on imported energy. Instead, the company noted that it would likely redirect exports once intended for Lodamun to new markets throughout the world, including Artania, Majatra, Dovani, Temania and other parts of Seleya, while building a new, transition-compatible business at home. “I don’t see this as a retreat. Now, a reinvention of the company,” said Neftkomp CEO Denis Polyakov via the press statement. “Our production remains profitable, but Lodamun is now a fundamentally different market. It is our belief that CNG offers us the ability to still service that market without having to shutter operations entirely.”

A recent court filing revealed that Neftkomp had created “Neftkomp GasTech", a wholly-owned sub-subsidiary focused on CNG production from compression and shipment to distribution. GasTech would use natural gas extracted from Neftkomp’s Nadiyan/Trigunian well/basins, compress it and transport it to Lodamun tariff-free under the Green Compact’s transitional fuel ‘cut-out’. Executives have noted that Phase One of the company’s CNG strategy would involve constructing three import/export terminals in Brakav. “Compressed natural gas is not a new technology and has been around for a while. Indeed, it was Neftkomp centuries ago that introduced CNG to Nadiya/Trigunia. However, amidst changing dynamics and geopolitics, its use in Trigunia subsequently fell into obscurity, and thus it remains a largely unheard-of fuel source,” Elena Kavarsky, GasTech’s newly appointed Managing Director, explained. Compressed natural gas refers to natural gas that has been compressed to less than 1% of its original volume. This is achieved when natural gas is extracted from wells where it is subsequently processed to remove water, hydrogen sulfide and other impurities. Utilising high-pressure compressors, the gas is pressurised to around 3,200 psi, where the resulting CNG is stored in reinforced cylinders. When it burns, it emits significantly less carbon dioxide, sulfur oxides and particulates compared to diesel or conventional gasoline. “CNG represents a bridge fuel between hydrocarbons such as crude oil and raw, unfiltered natural gas and fully renewable energy systems,” explained Dr Ekaterina Solovyova, Neftkomp’s new Vice President for Gas Technologies. “It is familiar, it is mature, and it can dramatically reduce the emission profile of light-industrial energy use. Perfect for what the Green Compact now mandates for energy imports.”

Officials within the Corporation for Sustainable Development (CSD) have noted that NSP and Neftkomp’s pivot towards biofuels could become a template for legacy oil and gas companies navigating the new energy rules. Jared Galbraith, the Director of the Office for Environmental Equity and a Justice Transition, praised the decision while cautioning that CNG is not a permanent solution. “What we need in the short term are pragmatic approaches that reduce emissions and our dependency on fossil fuels, while we scale up green infrastructure. CNG does that. But in the long-term, Lodamun will move past natural gas entirely,” he said. In Brakav, where Neftkomp operates its largest processing hub, workers have expressed a mixture of anxiety and guarded optimism at the company’s new diversification strategy. “We’ve been hearing rumours for months,” said Andrei Chistyakov, a Neftkomp employee. “If they’re building new CNG terminals here, that means more jobs for the people who live here. But every time we hear the higher-ups say transition, we wonder if we’re next on the chopping block. I don’t think people working for Nadcomp have that issue. They don’t seem to be leaning into that green stuff as much as Neftkomp and NSP.” The company’s press statement noted that a CNG processing facility, estimated to cost around 1.1 billion LOD (find the Trigunian conversion), had been granted approvals for construction alongside the CNG terminals. NSP Global CEO Simon Munn noted that the parent company was prepared to help Neftkomp financially. “Their success is our success,” Munn said in a reply to a tweet on the prospect of NSP providing loans to Neftkomp for the otherwise capital-intensive diversification strategy.