• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 58 mins Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 18 mins IMO 2020:
  • 6 hours China's Blueprint For Global Power
  • 12 hours World Stocks Drop And Futures Tread Water After China Reports Worst GDP Growth In 30 Years
  • 2 hours Brexit agreement
  • 3 hours The Ultimate Heresy: Technology Can't Fix What's Broken
  • 20 hours National Geographic Warns Billions Face Shortages Of Food And Clean Water Over Next 30 Years
  • 20 hours ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 20 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 13 hours Deepwater GOM Project Claims Industry First
  • 44 mins Idiotic Environmental Predictions
  • 16 hours Why did Aramco Delay IPO again ? It's Not Always What It Seems.
U.S. Sanctions Have Oil Markets On Edge

U.S. Sanctions Have Oil Markets On Edge

The frequency with which the…

Gazprom Deal With China May Cost Russia

Russia’s deal to sell an estimated $400 billion in gas to China may require an initial investment from Moscow.

Vladimir Putin, Russia’s president, told an energy convocation in Astrakhan, Russia, on June 4 that Gazprom, Russia’s government-owned gas company, may need several billion dollars worth of new capital to build pipelines and tap new fields to keep the gas flowing.

Putin gave no details, but indicated the money could come from the country’s gold and foreign exchange reserves.

Moscow estimates that the deal to sell gas to China over 30 years, beginning in 2015, could add between 0.3 and 0.4 percentage points to Russia’s economy. The central bank in Moscow says the economy is forecast to grow by only 0.5 percent in 2014.

Russia has said it intends to invest $55 billion to tap new sources of gas and build the pipeline to China’s border. The China National Petroleum Corp. will build the Chinese section.

Related Article: CNPC Deal Becomes Russia’s Gateway to Asian Gas Market

The deal with China is certain to help Russia’s economy, which has been sluggish because of a lack of overall reforms since the breakup of the Soviet Union and, more recently, economic sanctions from the West for its invasion and annexation of Crimea in March. Investing billions of dollars in the China project is expected to cause further strain.

In part because of these sanctions, the deal with China is a way for Russia to diversify its customer base if EU countries succeed in weaning themselves from their current heavy reliance on Russian gas. Still, May gas deliveries to Europe were up more than 10 percent over levels from one year ago, Gazprom CEO Alexei Miller said June 3.

But that may be because European clients are stockpiling gas for fear of a cutoff in case Ukraine cannot maintain its payments to Gazprom. EU countries get about 30 percent of their gas from Gazprom, and half of that is piped through Ukraine.

If Ukraine runs out of gas, it may tap its pipelines for gas destined for Western Europe, as it did in 2006 and 2009.

By Andy Tully of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play