Volga Gas notes LPG project authorisation

Volga Gas said directors have given preliminary authorisation to a project based at the Group's Dobrinskoye Gas Processing plant for the capture, storage and sale of liquid petroleum gases (LPGs) from the gas and condensate streams produced from the Vostochny Makarovskoye and Dobrinskoye fields.

LPGs, primarily comprising propane and butane, are currently either included in the sales gas stream or flared.

The LPG project will provide an additional product stream which is expected to increase total sales volumes by approximately 10% and to enhance profitability.

The construction of the project is expected, subject to the necessary regulatory approvals, to commence during 2Q 2017 and be completed before the end of 2017. The total capital investment in the project is estimated at $5.0 million.

The project can be funded from the Group's existing cash resources which currently stand at approximately $13 million.