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Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

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Gazprom Opens Natgas Pipeline to Sakhalin

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 Russia’s 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 pipeline’s throughput capacity to 30 bcm by 2020. Gazprom will initially use Russia's share of  natural gas from its Sakhalin-2 development, which operates under a production sharing agreement, as initial throughput for the pipeline to Vladivostok, along with  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 Yakutia’s 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


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  • Anonymous on September 13 2011 said:
    I believe that I discuss the Sakhalin operation in my forthcoming energy economics textbook. In particular, one of the Majors decided to rip our Russian friends off, and apparently got away with it for a while.But - also apparently - our Russian friends decided to play a little hardball, and according to this excellent note things have worked well for them. Now, if they can just cut down on the vodka, Russia is on its way to being one of what Helmut Schmidt called the BIG THREE in fact as well as theory.

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