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Russia’s Gazprom may prepay pipe firms for China gas pipeline supplies

September 25, 2014, 18:30 UTC+3 VYKSA

The advanced payment will be granted for price discounts

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© ITAR-TASS/Valery Sharifulin

VYKSA, Nizhny Novgorod Region, September 25. /ITAR-TASS/. Russian gas giant Gazprom on Thursday signed an agreement on a possibility of advanced payments for pipe supplies to lay the Power of Siberia pipeline with major pipe companies Severstal, TMK, United Metallurgical Company (OMK) and Chelyabinsk Tube-Rolling Plant (ChelPipe).

The advanced payment will be granted for price discounts, a representative for one of the pipe companies said, adding that the prepayment may stand at up to 40% and a discount at around 10%.

In early August, Gazprom received the first batch of pipes to lay Power of Siberia which will carry gas to China. The company plans to get more than 120,000 tonnes of pipes in 2014, it said earlier.

OMK President Vladimir Markin said that pipe companies have supplied 30,000 tonnes of pipes for Power of Siberia as of Thursday. In 2015, the supplies may amount to 600,000 tonnes, he said.

Gazprom will organize tenders to choose more pipe suppliers for Power of Siberia in two to three weeks, as well as tenders for construction works for this pipeline until mid-November, a representative for Gazprom said.

Gazprom may increase large-diameter pipe purchases to 2.0 million tonnes in 2015 from 1.3 million tonnes in 2014, Ivan Shabalov, chairman of Russian pipe producers’ association, said.

Infographics Supplies of Russian natural gas to China

Supplies of Russian natural gas to China

May 21, 2014, Gazprom and CNPC have signed a deal on gas supplies to China
New Russia-China gas pipeline

The Power of Siberia gas pipeline estimated at $21.3 billion is intended to pump 61 billion cubic meters of natural gas annually and will stretch over a distance of 3,968 km (2,465 miles).

The pipeline is designed to pump natural gas from the giant Chayanda oil and gas condensate deposit in Yakutia in northeast Russia and the Kovykta gas condensate field in the Irkutsk Region in Eastern Siberia. The Power of Siberia will run along the operational East Siberia - Pacific gas pipeline, crossing marshlands, mountainous and seismically active areas.

The first stage envisages the construction of the Yakutia-Khabarovsk-Vladivostok trunk gas pipeline. During the second stage, the Irkutsk gas production center based on the Kovykta deposit will be connected with the Yakutia center based on the Chayanda field.

The gas pipeline’s first stage is scheduled to be commissioned in 2017.

The Chayanda oil and gas condensate field in the Lensky district of Yakutia was discovered in 1989. The field, one of Russia’s largest undeveloped deposits, holds about 1.45 trillion cubic meters of natural gas and 93 million tons of liquid hydrocarbons. The field is expected to produce up to 25 billion cubic meters of natural gas and at least 1.5 million tons of oil annually.

The Kovykta gas condensate deposit discovered in 1987 is located in the north of the Irkutsk Region. The deposit’s reserves are estimated at 1.9 trillion cubic meters of natural gas, 2.3 billion cubic meters of helium and 115 million tons of liquid gas condensate.

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