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China’s economic growth change to affect gas supplies conditions — Gazprom

Terms of gas supplies form Russia's Sakhalin to China are currently being discussed

© Dmitriy Rogulin/ITAR-TASS

MOSCOW, June 14. /TASS/. A change in China’s economic growth rate will influence conditions of gas supplies to China from the production center on Russia’s Sakhalin, Deputy Chief Executive Officer of Russian gas holding Gazprom Alexander Medvedev said on Tuesday.

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"Terms of supply are currently being discussed. Changes in the economic growth rates in China could not but influence forecast gas consumption rates. Natural gas consumption will double and will continue growing," Medvedev said.

According to Medvedev Gazprom considers Sakhalin-1 project gas to be resource for Train 3 of the Sakhalin LNG plant.

"Several options are viewed as gas resources [for Train 3 of the LNG Plant - TASS], including the gas from the Kirinskoe and Yuzhno-Kirinskoe fields. The Sakhalin-1 gas is the second source," Medvedev said.

Gazprom plans to complete construction of two more wells on the Kirinskoe Field of the Sakhalin-3 project.

Two wells are currently in service of the field. Their count is scheduled to be increased to seven in 2019. Field production amounted to 604.6 mln cubic meters in 2015 and is projected to reach 5.5 bln cubic meters [per year] when reaching the full scale development phase, Gazprom said.

Yuzhno-Kirinskoe field development plan has also been prepared. Field infrastructure facilities engineering is underway. Gas production on the field is expected to start in 2021, the Russian gas holding said.

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Western Route contract

Chief Executive of Gazprom Export Elena Burmistrova on Tuesday dwelled on the prospects of signing a contract on Russia gas supplies to China along the so-called Western Route.

According to the offiicial Gazprom will be able to more accurately predict time for signing of the gas supply contract after talks with the Chinese side at the St. Petersburg International Economic Forum (SPIEF) and the visit to China in late June.

"We will continue certain meetings within the SPIEF framework. The visit to China is also planned at the turn of June. Then we will be probably more accurate in forecasting these [contract signing - TASS] dates," she said.

Alexander Medvedev says Gazprom is more cautious now in respect of forecasting the contract execution date because it has repeatedly been postponed.

The Western Route [Power of Siberia-2 natural gas pipeline] provides for supply of 30 bln cubic meters of gas to China over a period of 30 years. Direct supplies are scheduled to start in 2019.

Сhinese companies' participation in projects in Russia

The deputy CEO of the Russian gas giant has also pointed out that Gazprom may grant access to Chinese companies to projects in Russia only on conditions of asset swap.

"Participation of foreign partners in production projects on the Russian territory is only possible in case we also receive an asset which is strategically profitable and equivalent in size, better if it is also in production sector," he said.

Gazprom's hydrocarbon production

At the end of 2015, production by Gazprom amounted to 418.5 billion cubic meters of gas, including 8.4 billion cubic meters of associated gas.

Initially, the planned volume of gas production for 2015 was approved at the level of 485.36 billion cubic meters, but later due to a decline in demand it was revised to 414.1 billion cubic meters.

In 2015, companies of Gazprom Neft Group produced 55.7 million tonnes of oil.

According to the website of Gazprom, as of December 31, 2015, the Group was developing 138 hydrocarbon fields. The main center of gas production remains in the Nadym-Pur-Taz oil and gas region in Yamalo-Nenets District.

The Group’s main activities for the development of oil reserves were conducted on the territory of Yamalo-Nenets District and the Khanty-Ugra District, in Tomsk, Omsk, Orenburg and Irkutsk regions.

Russia’s strategic regions of gas production in the long term are the Yamal Peninsula, Eastern Siberia and the Far East, the Russian continental shelf.

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