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Gazprom plans to build 400 km of Power of Siberia pipeline in 2016 — company’s top manager

Gazprom has alsready built 115 km of the Power of Siberia pipeline by now

MOSCOW, May 19. /TASS/. Russian gas giant Gazprom has cut its plans on construction of the Power of Siberia pipeline for 2016 to optimize costs and now plans to build 400 km not 800 km as it was earlier planned, Vitaly Markelov, member of the company’s management board told a press conference on Thursday.

"By now we have built 115 km of the Power of Siberia. This year it is planned to build 400 km. We have cut our plans on construction considering optimization of costs, but we don’t change our plans on launching new capacities before 2018," he said.

Gazprom is now building the Power of Siberia pipeline to transport gas from gas fields in Eastern Siberia (Chayandinskoye field in Yakutia and Kovykta field in Irkutsk region) to the domestic market (cities of Khabarovsk and Vladivostok) and for export to China.

The line of the gas pipeline to the eastern regions of China, known as "eastern route", will be built on the Russian-Chinese border near the city of Blagoveshchensk.

Under the $400 bln contract, signed on May 21, 2014 between Gazprom and CNPC (China National Petroleum Corporation, CNPC), 38 billion cubic meters of gas will be annually supplied via on the "eastern route" for 30 years.

An intergovernmental agreement signed in October of 2014, sets the terms of Russian-Chinese partnership in design, construction and operation of cross-border zones of the gas pipeline.

The construction of the 3,170 km long Chinese section of the pipeline from the city of Heihe on the border with Russia to Shanghai began in June 2015.

CNPC is planning to complete it in 2018. By this time, Gazprom is to put into operation and the Russian part of the infrastructure of the Power of Siberia together with the transboundary underwater section across the Amur River. First gas supplies may start in 2018-2019.