Page 61 - RUSRptAug18

Bulgaria and include it in the country’s network. He announced the news at a joint press conference following a meeting with Russian President Vladimir Putin, though a few hours later Putin’s spokesman clarified that nothing had been decided yet. The extension will have to be negotiated between the European Union and Moscow. Miller said he could not say an exact date, but the commissioning of both the first and second legs of the gas pipeline will happen by the end of 2019.
Gas supplies to China via the Power of Siberia natural gas pipeline will reach the contracted level of 38bn cubic meters by 2024, CNPC’s representative said in July. "Supplies via the ‘eastern route’ are expected to start by the end of next year, initial volumes are 5bn cubic meters, which will reach 38bn cubic meters per year by 2024," he said. The date of the start of gas supplies via this pipeline has been set at December 20. The Power of Siberia gas trunkline will transport gas from the Irkutsk and Yakutia gas production centers to consumers in Russia’s Far East and China (the so-called ‘eastern route’). In 2018, Gazprom plans to invest almost RUB218bn ($3.9bn) in the project. In 2017, Gazprom's investments into the Power of Siberia pipeline amounted to 158.8bn ($2.8bn). In May 2014, Gazprom and China National Petroleum Corporation (CNPC) signed a sales and purchase agreement for gas to be supplied via the ‘eastern route’ (Power of Siberia gas pipeline). The 30-year agreement provides for Russian gas deliveries to China in the amount of 38bn cubic meters per year. The contract is worth $400bn.
Representatives of Russia's largest oil companies discussed the oil and gas sector "tax manoeuvre" with First Deputy PM Anton Siluanov and Deputy PM Dmitry Kozak on July 12, according to Kommersant daily. The fiscal reform in the oil and gas sector suggests full cancellation of the export duty tax by 2024, and its replacement with the mineral extraction tax (MET). The reform is one of the measures swiftly passed by the government to finance President's Vladimir Putin's RUB8 trillion spending drive and has previously been viewed as negative for the sector by analysts. Reportedly now the industry reps have managed to lobby several changes to the bill that will be reviewed by the State Duma in the second reading. Namely, refineries with logistical disadvantages will receive a special coefficient to the negative excise tax rate for crude oil. This adjustment is mostly related to Siberian refineries inclusive of Rosneft's, Gazprom Neft's Omsk refinery, as well as Lukoil's Ukhta in the Komi Republic. Should capital expenditures on modernisation exceed RUB60bn ($1bn), refineries might receive negative excise duty until 2029 without complying with the restriction on 10% of gasoline. In addition, floating excise tax rates levied on domestic sales of oil products will be introduced, allowing the state to subsidise domestic customers and avoid rapid growth in domestic oil products prices if the export netbacks are too high. According to Kommersant, the government is to subsidise around RUB400bn ($6.4bn) to refineries in 2019 through the floating excise rate under current prices (including increased excise and VAT).
Russia’s reduced its flows of gas across Ukraine by 7% during the first half of this year , compared to the same period last year. Ukraine’s massive gas pipeline system handled 42.5bn cubic meters of gas during the first six months of this year, Ukrtransgaz reports. By contrast, Russia increased its gas flows through by 13.7% last year, over 2016, partly due to the temporary closing of Nord Stream for repairs on the line, which was commission in Nov. 2011.
61 RUSSIA Country Report August 2018 www.intellinews.com