Page 9 - FSUOGM Week 07 2023

FSUOGM PIPELINES & TRANSPORT FSUOGM

Russia, China sign intergovt deal on

Far Eastern gas supplies

RUSSIA RUSSIA and China have signed an intergovern- for 38 bcm per year of gas via the Power of Sibe-
mental agreement on pipeline gas deliveries via ria pipeline. Power of Siberia supplies started in
The latest agreement the Far East, the Russian energy ministry has 2019 and rose 50% last year to a record 15.5 bcm.
sets out the key reported in a document last week, moving the Neither side has specified when supplies via
parameters of a supply two sides to a new stage in negotiations on the the Far East might start, however.
deal agreed by the two supply route. The Chinese market is central to Russia’s
sides in February last The agreement, signed by the two govern- plan to expand eastward gas shipments fol-
year. ments on January 31, sets out the key parameters lowing the loss of most of its market share in
for a 10 bcm per year gas supply contract that Europe over the past year. Moscow and Beijing
they clinched in February 2022. It also gives Gaz- are also discussing a 50 bcm per year contract to
prom the exclusive right to supply gas to China underpin the construction of Power of Siberia
via the route, which will run from the Sakha- 2, which would run from the Russian Arctic to
lin-Khabarovsk-Vladivostok pipeline and across China through Mongolia. It would supply gas
the Ussuri river near the Russian border town of from fields that until recently served the Euro-
Dalnerechensk, north of Vladivostok. pean market.
The document also stated that both sides The Far Eastern supplies would come from
were committed to using their own national cur- Gazprom-operated fields off the coast of Sakha-
rencies for payments under the contract. lin Island. Gazprom has exclusive usage rights at
The contract covering supplies via the Far all of Russia’s export pipelines, while fellow state-
East is the second gas supply deal that Russia and owned major Rosneft has long been pushing for
China have reached, following the 2014 contract this monopoly to be ended. ™

PROJECTS & COMPANIES

CEZ takes Gazprom to court over lost

gas supply

RUSSIA CZECH energy company CEZ has sued Rus- mostly with piped supply from alternative
sian state gas supplier Gazprom for $45mn sources as well as LNG.
A number of other for failing to deliver enough gas, local media CEZ uses gas to generate electricity, and it is
buyers have similarly reported on February 9. also a major gas supplier to households in the
taken Gazprom to court The court case relates to the undersupply Czech Republic.
over lost gas supply in of gas last year, a company spokesperson was As Russia has ratified the New York Conven-
the last year. reported as saying by newspaper Idnes. tion on international arbitration, “Gazprom’s
“The decision on arbitration procedures to assets in foreign countries can potentially be
take place in Geneva will be made by an arbi- seized,” Petr Tomasek, of the Faculty of Law
tration court of three people,” the newspaper of Charles University, told the Czech News
reported. There is a chance that CEZ could Agency. “However, such a possibility is rather
receive compensation if it manages to prove unlikely for assets located in Russia.”
that Gazprom did not comply with its supply Gazprom may be able to argue that it was
contract. impossible to honour the supply contract
The Czech Republic received practically with CEZ because of EU sanctions or another
all of its gas from Russia prior to the war in “greater force,” such as gas pipeline explosions,
Ukraine. But as of now, it now receives only Tomasek added. Gazprom’s Nord Stream 1 and
3-4% of its needs from Gazprom, which cut 2 pipelines were partially destroyed in late Sep-
supply to a number of European customers tember as a result of suspected sabotage.
last year as a result of disruptions at the Nord According to CEZ, gas deliveries were unsta-
Stream pipelines and a Kremlin decree that ble even before EU sanctions were imposed.
required buyers to pay in rubles instead of Gazprom is facing similar arbitration cases
the currencies stipulated in their contracts. with European buyers including Germany’s
The Czech Republic has replaced Russian gas Uniper and EU. ™

Week 07 15•February•2023 www. NEWSBASE .com P9