Page 9 - FSUOGM Week 01 2023

FSUOGM PIPELINES & TRANSPORT FSUOGM

Russia kicks off gas flow through Power

of Siberia from second field

RUSSIA RUSSIA’S Gazprom has launched a second field of Siberia 2, would source gas from fields that
to flow gas to China via the Power of Siberia formerly served the European market.
The target is 38 bcm pipeline, supporting Moscow’s goal of expand- Chinese customs data showed in October
per year of gas by ing eastward exports to replace lost sales to the 2022 that Russia had overtaken Australia to
2025. European market. become the second biggest gas supplier to China.
The start-up of the Kovyktinskoye field in The customs data includes both pipeline and
the Irkutsk region was marked by a ceremony LNG supplies. In first place is Turkmenistan, but
on December 21 attended via teleconference by Russia is poised to overtake that country as well
Russian President Vladimir Putin and Gazprom unless there is movement on plans for a fourth
CEO Alexei Miller. Following the launch of a line to be added to the Central Asia-China gas
first gas treatment unit, Kovyktinskoye is capa- pipeline. The project has been languishing for
ble of flowing 6bn cubic metres per year of gas to years.
China, complementing existing deliveries from
the Chayandinskoye field in Yakutia. Once three Further growth in Russian flow?
more units are brought on stream, production The outlook for a further expansion in Russian
at the field will reach a plateau level of 27 bcm gas pipeline supplies to China will depend on
per year. how quickly Beijing and Moscow can settle on
Gazprom is contracted to send at 38 bcm per a contract to underpin Power of Siberia 2, and
year via the Power of Siberia under a 30-year con- how quickly Gazprom can develop additional
tract it struck with CNPC in 2014. But this peak gas transport infrastructure to send gas from
level is not anticipated to be reached until around the Arctic and via the Far Eastern route. In the
2025 – six years after the pipeline’s launch. case of Power of Siberia 2, upstream capacity is
Kovyktinskoye’s start-up comes after Gaz- already available at fields that formerly supplied
prom completed an 804-km pipeline earlier this Europe, unless there is a rapprochement in Rus-
month linking the field with Chayandinskoye. sia-EU energy ties. In the case of the Far Eastern
This makes the Power of Siberia now 3,000 km route, new upstream investments will need to be
in length. made at fields off the coast of Sakhalin Island.
“In the east of the country, we have formed The 2014 contract for Power of Siberia took
a strategically important infrastructure complex considerable negotiation – the first serious dis-
for Russia of production, transport and process- cussions began over a decade ago. Russia also has
ing facilities. There are simply no analogues to scarcer financial and technical resources since it
this in the world,” Miller said in a statement. was isolated by the West in response to its war
“Today we launched new key facilities. This is a in Ukraine.
unique [field and] the largest in Eastern Siberia Another factor is how quickly Russia can roll
in terms of gas reserves.” out new LNG projects. While Novatek insists
Kovyktinskoye’s total gas resources are that its second terminal, Arctic LNG-2, should
assessed by Russia at 1.8 trillion cubic metres. start up as originally planned in 2023, despite
In addition to gas, the field also yields gas con- fallout from the situation in Ukraine, future
densate that can be used to produce motor fuels developments are expected to struggle.
and plastics. Infrastructure has been established Significant construction on Arctic LNG-2’s
to stabilise this condensate and transport it to first train had already taken place before Western
industry, Gazprom said. This includes a 173-km partners began withdrawing from the project.
pipeline and a railway loading terminal. But work on its second and third trains, sched-
In addition to flow via the Power of Siberia, uled for launch in 2025 and 2026, is at a more
Russia signed a contract in February to pump limited stage. And Russia is acutely dependent
an additional 10 bcm per year of gas to China on Western technology, services and equip-
via a newly planned pipeline that will enter the ment in the LNG sector. This is not to mention
country in the Far East. Moscow and Beijing are the country’s restricted access to international
also in talks to reach a contract to underpin a far financing.
more ambitious project – a pipeline to deliver 50 Other prospective Russian LNG projects such
bcm per year of gas from the Russian Arctic to as Arctic LNG-1 and Arctic LNG-3 will face even
China through Mongolia. This pipeline, Power greater hurdles. ™

Week 01 04•January•2023 www. NEWSBASE .com P9