Gazprom postpones China gas pipeline construction

Russia’s state-owned gas producer, Gazprom, has postponed the planned construction of its gas pipeline to China until next year. The pipeline, known in Russia as the Power of Siberia, was designed to carry gas to Russia’s Pacific coast in order to feed a new liquefaction plant at Vladivostok.

Vedomosti, the Russian business daily newspaper, said “Gazprom delayed the start of the construction of its Power of Siberia gas pipeline to transport gas to China from November 2013 to the first quarter of 2014”. A spokesman for Gazprom has declined to comment on the report.

Gazprom and China have long been negotiating gas prices, and Gazprom’s managers have repeatedly said the gas price was the only issue that remained unsettled.

The Power of Siberia pipeline

A tentative agreement between Gazprom and China National Petroleum Corporation, signed in March, envisages the annual supply of up to 30 billion m3 of gas to china. In a presentation for investors, Gazprom estimated that US$40 billion is to be invested in the project.

The final deal between Gazprom and CNPC was expected to be signed during this year’s St. Petersburg International Economic Forum in June.

The delay is an embarrassing setback for Russian President Vladimir Putin, who has urged Russian companies to expand their reach in the lucrative energy markets of Asia, and comes just after Turkmenistan’s agreement to increase its gas supplies to China.

Edited from various sources by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/05092013/gazprom_postpones_china_gas_pipeline_construction/