Gazprom, China talks on gas supplies via eastern route progressing:CEO
Moscow (Platts)--11Dec2012/506 am EST/1006 GMT
The recent final investment decision taken by Gazprom on the development
of the giant Chayanda gas field in East Siberia paves the way to move
negotiations forward on gas supplies to China via the so-called eastern
route, Gazprom CEO Alexei Miller was quoted as saying in a company statement
"The final investment decision on...Chayanda and the construction of the
Yakutia-Khabarovsk-Vladivostok trunk pipeline has moved talks on gas supplies
to China via the eastern route to a practical level," Miller said.
Last Friday, Miller said that Gazprom and its Chinese partners had
re-started their negotiations on supplies via the eastern route.
The capacity of the route may be increased from the previously planned
38 billion cubic meters/year, Miller said at the time.
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Gazprom had also revised its price proposal for gas supplies to China
via the western, or Altai, route, Miller said at the time.
"Gazprom has made a new proposal of the base price due to a reassessment
of the [costs] of the Altai pipeline," Miller told reporters.
"For several months, we've been conducting a very thorough study to
optimize expenditure. The key aim was, on the one hand, to keep the price at
a level similar to that in Europe, and on the other hand, to reduce the price
of gas somewhat on the Sino-Russian border," Miller said Friday, without
Moscow and Beijing signed a contract in 2010 for 30 Bcm/year of gas to
be sent to western China from 2015 via the western Altai route, while a 2006
initial agreement also allowed for 38 Bcm/year of additional gas to be piped
from eastern Siberia to eastern China.
China's preference has been for gas to be delivered via the eastern
route -- close to major eastern coastal demand centers -- as it would reduce
transport costs significantly.
However, talks over the actual supplies stalled over the price issue.
In late October, Gazprom took a final investment decision on the
development of the Chayandinskoye, or Chayanda, project in the Russian
Republic of Sakha (Yakutia) in East Siberia, and construction of a pipeline
linking the field to the port of Vladivostok.
Gazprom said it is planning to spend Rb430 billion ($13.7 billion) on
developing Chayandinskoye, and a further Rb770 billion on a pipeline which
will run from Yakutia to Vladivostok via Khabarovsk.
The pipeline is set to have a capacity of 61 Bcm/year of gas and come
online in late 2017.
Under the FID, the development of Chayanda's crude oil rim is scheduled
to start in 2014 and that of the field's gas deposits in 2017.
--Dina Khrennikova, email@example.com
--Edited by Jonathan Dart, firstname.lastname@example.org