Page 10 - FSUOGM Week 42 2021

FSUOGM PIPELINES & TRANSPORT FSUOGM

Russia, China agree on route

for second gas pipeline

RUSSIA RUSSIA and China have agreed on the route gas supplies.
for a second pipeline to bring Siberian gas to the “We think that the current gas shortage and
Putin said the two sides Chinese market, Russian President Vladimir extremely high prices in both Europe and Asia
had agreed "in principle" Putin said on October 14, although a gas supply will make it easier for Gazprom to get a fair price
on the route. price likely remains a sticking point. from the deal,” the brokerage said in a research
Putin said the two sides had agreed “in prin- note. “And we think the odds of a final agreement
ciple” on the route through Mongolia, indicating being reached in the next 12 months have much
that an early plan to build the pipeline through improved.”
Russia’s Altai region is now off the table. Analysts Building a gas pipeline between two coun-
at BCS Global Markets (BCS GM) said running tries is rarely an easy undertaking, requiring
the pipeline through Mongolia would reduce both strong political will and a firm commer-
the overall transport distance between Western cial rationale. In China and Russia’s case, price
Siberian fields and Beijing from 5,000 km to has traditionally been a sticking point in talks.
4,600 km. It also means the pipeline will deliver Gazprom and CNPC held discussions on a
gas to the Chinese border some 2,000 km closer large-scale supply deal for their first pipeline,
to the core industrialised regions of China. Power of Siberia, for a decade before reaching
Altai had been Russia’s preferred option for a $400bn sales and purchase agreement (SPA)
the route, as this would require less pipeline in 2014.
construction in its territory. On the other hand, Power of Siberia was brought on stream in
China would have had to build thousands of December 2019 but it is expected to take several
kilometres of pipeline through its sparsely pop- years for the pipeline to flow gas at its full capac-
ulated and restive Xinjiang province. ity of 38bn cubic metres per year. The pipeline
While an agreement on the pipeline’s route is through Mongolia will carry 50 bcm per year,
a clear sign of progress, BCS GM said this was from fields Gazprom is developing in the Arctic
less important than a deal on the price for future Yamal Peninsula.™

ENERGY TRANSITION

Sakhalin Energy delivers first

carbon neutral LNG

RUSSIA THE Gazprom-led Sakhalin Energy consortium Sakhalin Energy CEO Roman Dashkov said in
has delivered its first carbon neutral/offset LNG a statement.
Sakhalin Energy wants from its terminal on Sakhalin Island to Japan, the Sakhalin Energy previously entered into a
to buy credits from a group announced on October 13. decarbonisation pact with Toho Gas. Besides
carbon trading system The cargo was put on board Russia’s Grand Gazprom, the consortium’s members are Royal
that will be launched Aniva LNG carrier and transported to Japan’s Dutch Shell, and Japanese companies Mitsui and
next year on Sakhalin Toho Gas` Chita terminal in Japan’s Aichi pre- Mitsubishi.
Island. fecture. Its emissions were offset using carbon Russian President Vladimir Putin has
credits obtained by Gazprom. ordered Gazprom to look into producing fuel
Moving forward, Sakhalin Energy wants to from gas condensate on Sakhalin Island, the
buy carbon credits from a pilot carbon trading Kremlin said on October 18.
system that is due to start up on Sakhalin next Gazprom will work with regional and federal
year to cover its future LNG supplies. The Far authorities to study the feasibility of producing
Eastern island is striving to become the first Rus- jet fuel, gasoline and diesel in the Far Eastern
sian region to reach carbon neutrality, as soon region, using condensate from its local gas fields
as 2025. as feedstock. Putin also ordered the government
Carbon neutral/offset LNG will be “a com- to submit proposals by December 1 on address-
petitive standard offer for many years ahead,” ing emissions on Sakhalin. ™

P10 www. NEWSBASE .com Week 42 20•October•2021