Gazprom is advancing with the construction of its Power of Siberia pipeline to China, which is now 83 percent complete, as the Russian gas giant looks to supply more pipeline gas to the Chinese market, where demand is expected to surge in the coming years amid growing efforts to switch from coal to gas.
As of May 17, a total of 1,791 kilometers (1,113 miles), or 83 percent of the linear section of the pipeline from the Chayandinskoye field to the Chinese border in the Amur Region, has been built, Gazprom said in a statement today.
“This year the main part of construction and installation works on this section will be completed,” the Russian company said.
Gazprom has a 30-year contract with CNPC for the supply of an annual 1.3 trillion cu ft of natural gas via the infrastructure. The pipeline is expected to start sending gas to China at the end of 2019 and its completion is among Gazprom’s top priorities.
This year, Gazprom plans to invest nearly US$3.5 billion (218 billion Russian rubles) in the pipeline project, up from the US$2.56 billion (158.8 billion rubles) investment last year, according to Russia’s TASS news agency.
Gazprom and CNPC have also discussed another pipeline from Russia to China via the western route—the so-called Power of Siberia 2 pipeline—that would source gas from Western Siberian gas fields, but little progress has been made regarding the specifics of this project.
Related: The Regulations That Could Push Oil Up To $90
Gazprom is dominating gas supplies to many European markets while it vies to meet the surging Chinese natural gas demand as the country is in the middle of a massive switch from coal-fired to gas-fired heating in millions of homes.
Natural gas demand in China is growing at a fast rate, and according to a recent report by Eurasia Daily, the Power of Siberia will be essential to solve future gas shortages in the north of the country. This winter, northern China experienced a shortage of gas due to colder than usual weather, and the local authorities have had to enact restrictions on gas consumption.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.