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Investigation casts shadow on

Gazprom’s eastern export plans

The Power of Siberia may fall short of its expected gas deliveries, according
to a new report, which suggests Gazprom deliberately hid project difficulties

COMMENTARY AN investigation by Russian news agency Lenta. it planned to begin building a pipeline section
ru has found that Gazprom will struggle to linking the field with Chayandinskoye in the
deliver on a landmark gas supply deal it reached third quarter. Kovyktinskoye will also flow 25
WHAT: with China six years ago. Its findings paint Rus- bcm per year at peak capacity, according to
An investigation by a sia’s ambitious Power of Siberia pipeline project Gazprom.
Russian news outlet as a costly misadventure, rather than the geopo- Power of Siberia is anticipated to reach its
suggests Gazprom will litical triumph it is hailed as by Moscow. full capacity of 38 bcm per year by 2025, having
not fulfil its commitments After over a decade of negotiations, Gazprom delivered only 5 bcm of gas this year.
under a $400bn gas deal agreed a landmark deal with Chinese counter-
with China. part CNPC in 2014 to deliver up to 38bn cubic Overstated potential
metre per year of gas to China over a 30-year However, Lenta.ru’s investigation, published on
WHY: period. The contract’s terms were never dis- May 28 and based on international reports and
The production potential closed, but Russian officials claimed at the time audio tapes obtained from Gazprom employees
of the Eastern Siberian that it was worth $400bn. and consultants, casts doubt on whether these
fields due to provide The agreement underpinned the construc- production targets will be met.
the gas has been tion of Power of Siberia, a 3,000-km gas pipeline Lenta.ru claims that Gazprom overestimated
overestimated, the connecting gas fields in Eastern Siberia with the the output potential of both fields. Furthermore,
agency claims. growing Chinese market. Power of Siberia was its senior management kept information about
brought on stream in December last year in a technical setbacks quiet, the agency says, amid
WHAT NEXT: ceremony led by Russian President Vladimir pressure from the government to fulfil the 2014
Gazprom is drawing Putin and Chinese President Xi Jinping. supply deal.
up plans for a second Power of Siberia is currently flowing gas from The estimate for Chayandinskoye’s recov-
pipeline to China, the Chayandinskoye field in Yakutia, which has erable gas reserves has already been revised
suggesting its lavish a planned output plateau of 25 bcm per year – a downwards from 1.45 trillion cubic metres to
spending habits will target Gazprom expects to reach in 2022-2023. 1.2 tcm. But according to Lenta.ru, the actual
continue. The company plans to commission a second field resources could be even smaller. Meanwhile,
in the neighbouring Irkutsk region, Kovyktin- the planned number of wells has been cut
skoye, by the end of 2022. from 335 to 278.
Gazprom said in April it was already drill- “The document shows numerous viola-
ing production wells at Kovyktinskoye, noting tions in the field’s development, condoned

P8 www. NEWSBASE .com Week 22 04•June•2020