Gazprom Expands in Asian Energy Markets with Western Russia-China Gas Pipeline

Strategic Insights -

Gazprom has announced plans to invest in a gas pipeline from western Russia to China, expanding its presence in Asian energy markets. The move comes after a meeting between Gazprom's CEO, Alexei Miller, and Chinese oil and gas companies in Moscow. The western route is a priority project, utilizing Gazprom's existing gas transport system and resource base, with gas supplies to start flowing from East Siberia through the "eastern route" in a second stage. This follows an agreement between Gazprom and China National Petroleum Corp. to sell up to 80 Bcm/yr of Russian gas to China through two pipelines.

Key Takeaways:

  • Gazprom plans to conduct an investment study for a gas pipeline from western Russia to China, expanding its presence in Asian energy markets.
  • The western route is a priority project, utilizing Gazprom's existing gas transport system and resource base.
  • Gas supplies will start flowing from East Siberia through the "eastern route" in a second stage.
  • Gazprom and China National Petroleum Corp. have agreed to sell up to 80 Bcm/yr of Russian gas to China through two pipelines.
  • The first pipeline will supply 30 Bcm-40 Bcm/yr by 2011, while the second pipeline will bring another 30 Bcm-40 Bcm/yr from eastern projects, such as the offshore Sakhalin fields.
  • Analysts doubt Gazprom's ability to get all the gas it's been talking about selling from its unified system, citing insufficient West Siberian reserves.

Statistics:

  • Up to 80 Bcm/yr of Russian gas to be sold to China through two pipelines.
  • First pipeline to supply 30 Bcm-40 Bcm/yr by 2011.
  • Second pipeline to bring another 30 Bcm-40 Bcm/yr of gas from eastern projects.

Sources:

  • NC Mar. 23, p3
  • NC Mar. 23, p5