Russia plans to ramp up geological prospecting and exploration of hydrocarbons - gas in particular - in the country's east as it looks to increase supplies of gas to Asian partners, Russian Natural Resources and Environment Minister Alexander Kozlov has revealed in an interview.
"We have set a priority for ourselves in geological prospecting and exploration and in aiding the search for mineral resources, particularly hydrocarbons, to be geographically closer to future consumers and transport infrastructure. For example, the Power of Siberia pipeline, gas from which goes to China. We have made the decision to carry out geological exploration throughout Yakutia and to do everything to [understand the production potential] in relation to hydrocarbons, particularly with gas, to be known. So that there's not one, but more pipelines going in the eastern direction. Because this is guaranteed revenue for our country, guaranteed sales to a major partner," Kozlov said.
Last week, Russian President Vladimir Putin inaugurated the Kovykta natural gas field in eastern Siberia, located strategically to allow Russia to increase gas exports to China amid growing tensions between Moscow and the West. The inauguration is the culmination of efforts that began about a decade ago to develop new fields and build the Power of Siberia pipeline to deliver to the rapidly expanding market.
"We are launching the unique Kovykta gas field, the largest in eastern Siberia. Its recoverable reserves are 1.8 trillion cubic meters of gas," Putin said via video link during a televised ceremony.
Currently, Russia lacks pipelines to transport gas from its Western Siberian and Arctic gas fields that serve China and Europe. The first Power of Siberia pipeline began to deliver gas from eastern Siberia to China at the end of 2019. It won't be the last. Moscow has laid out plans to build a Power of Siberia 2 pipeline as Russia increasingly turns to the Middle Kingdom in the face of heavy western sanctions. China and India have become some of the biggest buyers of Russian oil and gas, with Bloomberg's oil strategist Julian Lee revealing that Russia's flagship Urals crude oil has been trading at a massive discount of more than per barrel $30, or about 40% to the international Brent crude oil.
By Alex Kimani for Oilprice.com
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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. More