Page 9 - FSUOGM Week 29 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Power of Siberia 2 construction to

begin in 2024, says Mongolia

RUSSIA MONGOLIAN Prime Minister Oyun-Erdene produced on the Yamal Peninsula through Mon-
Luvsannamsrai has said he expects construction golia to China. But the project’s cost is certain to
The gas supply deal to of the Power of Siberia 2 gas pipeline to begin in run into the tens of billions of dollars, and Russia
underpin the project is the landlocked country in 2024, and for gas flow is yet to reach a gas supply deal to underpin this
not yet in place. to start in 2030. investment.
Moscow is scrambling to develop alternative It took over a decade for Russia to clinch a
export routes for its substantial gas reserves, as deal with China for gas supply via the Power
Europe, its largest market, pushes to eliminate of Siberia 1 pipeline, which it finally did in
Russian gas imports. While Russia has added 2014. Beijing is likely to drive a hard bargain,
cause to accelerate talks on Power of Siberia 2, as it has access to a number of alternative
the country may also struggle with financing sources of gas supply, and may seek to take
and implementation as a result of the economic advantage of Russia’s desperation to find new
malaise caused by Western sanctions. markets. The Chinese government may also
Russia and China have already finished a fea- be uncomfortable about relying too much on
sibility study for the 2,600-km pipeline, although Russia for gas supply, especially considering
they are still to decide with Mongolia on a final Russia has tarnished its image as a reliable gas
route. supplier after cutting deliveries to a number
“The feasibility study of this project has fin- of customers in Europe since the war broke
ished and we believe construction will begin in out in Ukraine.
2024,” Luvsannamsrai told the Financial Times And while talks with Moscow drag on, Chi-
in an interview on July 18. He added that Mos- nese gas importers have signed a number of gas
cow had not put pressure on Ulaanbaatar to deals in recent months with US LNG exporters.
accelerate construction. And the longer negotiations go on without pro-
At full capacity, Power of Siberia 2 is expected gress, the less market share Russia will be able to
to pump up to 50bn cubic metres per year of gas secure in the fastest-growing gas market. ™

Gazprom declares force majeure

on supply contract

RUSSIA RUSSIA’S Gazprom has declared force majeure it is due to return to operation on July 21 after 10
on gas supplies to at least one of its customers, days of routine maintenance work.
Gazprom has said it Reuters reported on July 18, citing a letter from According to Moscow-based Kommersant,
expedcts Siemens to the company it had seen. the turbine was delivered via plane to Germany
continue servicing its Dated July 14, Gazprom said in the letter on July 17. Earlier the newspaper had reported
turbines. that it was unable to fulfil its supply obliga- that the turbine would be sent on a ship, which
tion because of “extraordinary” circumstances would have taken considerably longer. Kommer-
beyond its control. The letter is related to sup- sant notes that it will take a further five or seven
plies via the Nord Stream 1 pipeline, which deliv- days for the turbine to arrive at the compressor
ers Russian gas to Germany and other major station in Russia, assuming there are no logisti-
markets in Central Europe under the Baltic Sea. cal or customs problems. A further three or four
Gazprom cut gas flow via Nord Stream 1 by days will be required to reinstall and commission
60% in June, resulting in a number of European the unit, suggesting that Nord Stream 1 will not
buyers claiming a reduction in deliveries. While be operating at full capacity until the end of July
European leaders said the cut was politically at the earliest.
motivated, Gazprom cited technical problems Gazprom said on July 16 it expected Siemens
relating to Siemens’ failure to return a turbine to continue servicing turbines needed for the
to the Portovaya compressor station in Russia reliable operation of Nord Stream 1. Canadian
that had been sent to Canada for repairs, due to press have reported that Gazprom is due to send
sanctions. another six to Canada for repair over the next
Nord Stream 1 is now offline completely, but two years. ™

Week 29 20•July•2022 www. NEWSBASE .com P9