Gazprom to Supply China by Pipe in Dec 2019

The CEO of Gazprom Alexei Miller and his counterpart at China National Petroleum Corp Wang Yilin signed in Moscow July 4 a supplementary agreement to the sales and purchase agreement for Russian gas to be supplied through the 38bn m³/yr Power of Siberia line. The oil-linked, take-or-pay contract was first inked by the parties on May 21, 2014.

“The signing of this document is a crucial step in the implementation of the project, a step achieved by Gazprom and CNPC thanks to clear and concerted action on both sides of the border. Our work is strictly on schedule, even ahead of schedule regarding Power of Siberia. Russian gas supplies to China will come right on time,” said Miller.

Both countries' presidents – Vladimir Putin and Xi Jinping – were also in attendance at the ceremony. According to the latest agreement, gas supplies to China through the Power of Siberia gas pipeline will start in December 2019 – which is also the start date for Gazprom to bring on line more transport capacity pointing westwards: flows through the 55bn m³/yr Nord Stream 2 and the 31.5bn m³/yr TurkStream projects are also due to start around that time.

But as well as the additions, there is also a planned reduction of flows through Ukraine to 15bn m³/yr, compared with the nominal capacity of some 120bn m³/yr. Gazprom will achieve this by adding decommissioning compressor stations in Russia in time for the termination of the 10-yr transit agreement with Ukraine at the end of December 2019.

William Powell