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More than two thirds of Power of Siberia gas pipeline ready by early February — Gazprom

The Power of Siberia gas pipeline will pump natural gas from Siberia to Russia's Far East and further on for exports to China

MOSCOW, Febuary 6. /TASS/. As of early February 2019, Russian energy giant Gazprom has already built 1480 kilometers, or two thirds of the Power of Siberia pipeline to transport Siberian gas to Russian Far East and China, a senior Gazprom manager told investors in New York on Tuesday.

"As of early February, we have already built 1,480 km, which makes more than two thirds of the stretch from the Chayandinskoye gas field to the Chinese border, needed to start gas deliveries to China," Kirill Polous said.

"Only in 2017, we built more than 900 kilometers [of the pipeline], which is way ahead of schedule," he added.

"At the moment, we keep working jointly with our Chinese partners on new pipeline projects," the official said. "And we expect to occupy 13% of the Chinese gas market by 2035."

Gazprom deputy CEO Alexander Medvedev said that "as soon as prices will be agreed, we will announce the start of deliveries." "I’m sure that this time it will take a lot less time than before," he added.


Deliveries to China

Currently, Gazprom is building the Power of Siberia gas pipeline, which will pump natural gas from the giant Chayanda oil and gas condensate deposit in Yakutia and the Kovykta gas condensate field in the Irkutsk Region in Eastern Siberia to deliver gas to the domestic market (via Khabarovsk to Vladivostok) and further on for exports to China. The pipe's section aimed for 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 value of the contract is estimated at $400 billion.

This year, Gazprom plans to invest 217.988 billion rubles in the project. In 2017, Gazprom investment in the Power of Siberia pipeline increased to 158.811 billion rubles ($2.7 bln) from 76.162 billion rubles ($1.3 bln).

The terms of the partnership in design, construction and operation of the cross-border zones of the gas pipeline are defined by an intergovernmental agreement dated October 13, 2014. The pipeline is expected to start delivering Russian gas to China on December 20, 2019.

In 2015, Gazprom and CNPC signed an agreement on the basic conditions of pipeline gas deliveries from Western Siberia to China via the "Western" route (Power of Siberia-2 pipeline). Initially supplies are envisaged at 30 billion cubic meters of gas per year. Also in 2015, Gazprom and CNPC signed a memorandum of understanding on the project of pipeline shipments of natural gas to China from Russia’s Far East.