• 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
  • 20 mins China's Blueprint For Global Power
  • 9 mins World Stocks Drop And Futures Tread Water After China Reports Worst GDP Growth In 30 Years
  • 5 hours National Geographic Warns Billions Face Shortages Of Food And Clean Water Over Next 30 Years
  • 5 hours ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 2 hours Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 1 hour Why did Aramco Delay IPO again ? It's Not Always What It Seems.
  • 5 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 7 hours Bloomberg: shale slowing. Third wave of shale coming.
  • 7 hours Why don't the other GOP candidates get mention?
  • 4 hours Deepwater GOM Project Claims Industry First
  • 5 hours Idiotic Environmental Predictions
  • 6 hours PETROLEUM for humanity 

Power Of Siberia Pipeline Ahead Of Schedule

Pipeline

The Power of Siberia gas pipeline that will carry Russian natural gas to China is moving ahead of schedule, with 720 km of the 3,000-km structure already built, Gazprom’s chief executive Alexei Miller told a Russian TV channel, as cited by local online media. Miller was also quoted as saying that Gazprom will settle the main terms of the deliveries via the Power of Siberia soon.

The pipeline is a key element in a 30-year gas supply deal between Moscow and Beijing worth US$400 billion in total. Under the terms of the deal, signed in 2014, the China National Petroleum Corporation, or CNPC, will buy 38 billion cubic meters of natural gas from Gazprom annually, starting in 2025. Before that year, it will be receiving smaller amounts of the fuel.

The full 38-billion cubic meter volume represented a fifth of China’s oil consumption in 2014 and 60 percent of its imports in that year.

The Russian side committed to spend US$70 billion, including US$35 billion for the construction of the Power of Siberia, US$20 billion for field development, and another US$15 billion for a gas-treatment plant, to be built on the Russian-Chinese border in partnership with local chemicals major Sibur.

The contract is of strategic importance for the two sides, more so for Russia, which needs markets for its gas more than China needs specifically Russian gas deliveries – everyone is eager to export gas to China as Asia’s second-biggest economy shifts away from coal and into less polluting energy sources.

While Gazprom is limited in its choice of markets and is facing stern opposition in the European Union because of its perceived dominant position, China can pick from a host of gas suppliers, including the U.S. Just last week, Presidents Donald Trump and Xi Jinping struck a deal for U.S. LNG supplies, as well as some goods, to China.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Sergei on December 19 2017 said:
    “… Russia, which needs markets for its gas more than China needs specifically Russian gas deliveries”

    Actually, Russia and China are both equally interested in this deal.

    Russia can sell LNG to any country in the world, but when selling to a direct neighbor, it's cheaper to build a pipeline. Especially since Russian companies own a complete supply chain required to build land pipelines (i.e. there's zero dependency on foreign companies). Similarly, China can buy LNG from any country in the world, but it's much cheaper to buy pipeline gas. Both countries save money. It's a win-win.

Leave a comment

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