TNK-BP Finds Help on Associated Gas

TNK-BP agreed to form a company with generator OGK-1 to burn natural gas pumped with crude and expand power supplies in western Siberia.

TNK-BP and OGK-1 signed a shareholders' agreement on the venture and plan to conclude long-term gas and power supply contracts relating to it in the "next few months," the companies said Monday.

OGK-1 will transfer its Nizhnevartovsk plant, which has two units with a combined capacity of 1,600 megawatts, to the venture, while TNK-BP will invest $320 million to add a new 800-megawatt unit within two years. The oil producer will own 25 percent and may buy as much as 50 percent minus one share.

Power demand in the Tyumen region, where the Nizhnevartovsk plant is based, has increased as oil companies pump more crude from depleted fields.

TNK-BP, whose largest field is in the region, may increase power consumption 50 percent to 12 billion kilowatts per year by 2010.