Russian state owned natural gas firm Gazprom in the presence of Russian Prime Minister Vladimir Putin has opened a multi-billion dollar undersea natural gas pipeline from Sakhalin island to Russiaâs Pacific port of Sakhalin.
The new 6 billion cubic meters (bcm) per year pipeline is regarded as a possible export source for Gazprom to reach the Japanese, South Korean and Chinese markets.
Putin told reporters, "This creates new conditions for development. From now on, this will enable our large companies to set up new production units and create... new well-paid jobs,"
Kommersant newspaper reported.
Gazprom hopes to expand the pipelineâs throughput capacity to 30 bcm by 2020. Gazprom will initially use Russia's share ofÂ natural gas from its Sakhalin-2 development, which operates under a production sharing agreement, as initial throughput for the pipeline to Vladivostok, along withÂ some natural gas from the ExxonMobil-led Sakhalin-1 project as well.
According to leaked information, Gazprom estimates that the Sakhalin-Vladivostok pipeline by the time it is increased to its full capacity of 30 bcm in 2020 will have cost $15.8 billion.
Gazprom has further development plans for its northwestern Pacific projects. Gazprom CEO Aleksei Miller said two months ago that in 2012 Gazprom would begin construction of another massive natural gas pipeline to deliver throughput from Yakutiaâs Chaiandinskoe field, linking up with the Sakhalin-Vladivostok link near Khabarovsk to create a pipeline network eventually capable of shifting 60 bcm of natural gas a year.
By. Charles Kennedy, Deputy Editor OilPrice.com