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All contract conditions between Gazprom and China in effect — deputy CEO

According to Gazprom's Deputy CEO Alexander Medvedev, new contracts for the Western route (Power of Siberia - 2) are being discussed

Construction of a gas pipeline to China Igor Ageyenko/TASS

Construction of a gas pipeline to China

© Igor Ageyenko/TASS

MOSCOW, April 26. /TASS/. All contract conditions between Gazprom and China are in effect. Moreover, new contracts for the Western route (Power of Siberia - 2) are being discussed, Deputy Chairman of Gazprom Management Committee Alexander Medvedev told journalists on Tuesday.

"Active work is in progress," he added.

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Earlier, Deputy Energy Minister Kirill Molodtsov said that Gazprom and CNPC actively negotiate increasing gas supplies through the Western route.

Before that, Deputy Prime Minister Arkady Dvorkovich told TASS that the construction period for the "western route" of gas supplies to China could be changed.

According to Dvorkovich, the Chinese economy and the country’s gas demand continue to grow as coal is substituted by gas, nuclear energy and renewable energy sources. "Which means the share of gas will still be growing. The issue is where they will purchase bigger volumes - in Russia, Australia or Qatar, for example. I think Russia could offer pretty easy terms of supplies. But the timeline may be slightly changed compared with what was expected earlier due to slower growth rates of the Chinese economy," he said, adding that in general the project is still relevant.

According to the memorandum of understanding on cooperation in the natural gas sector dated June 24, 2009, which was inked by Gazprom and CNPC, Russian gas will be supplied to the country in two directions - western and eastern.

The western route stipulates the delivery of 30 bln cubic meters through the pipeline from the Yamal-Nenets Autonomous District through the Altai region to the northwest of China within 30 years. For this purpose the Altai pipeline transport system will be constructed to run across the highly mountainous area of the Altai region in West Siberia to be further extended to the Russian-Chinese border. The plan is to launch direct supplies in 2019.

The eastern route implies the development of new fields in Eastern Siberia, firstly Chayanda field and Kovykta gas field. The Power of Siberia gas pipeline is going to be built starting from these fields, which later will be connected with the gas pipeline Sakhalin - Khabarovsk - Vladivostok. A branch pipe to China will be built near Blagoveshchensk. The eastern route stipulates the supply of 38 billion cubic meters of natural gas to China annually within 30 years. The project is worth $400 bln. First supplies are planned for 2018-2019.

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