14 Sep 2022 10:04

Already signed contracts can make Gazprom biggest gas supplier to China

ST. PETERSBURG. Sept 14 (Interfax) - The development of the gas sector in eastern Russia should in the long term lead to the connection of eastern gas pipelines to the existing unified gas supply system in the European part of Russia and Western Siberia, Gazprom deputy department head Kirill Polous said in a discussion on strategic planning at energy companies at the St. Petersburg International Gas Forum.

"In the first phase of the implementation of the Eastern Program, individual gas pipelines were built that solved applied problems. This is how the Sakhalin-Khabarovsk-Vladivostok gas pipeline was built. After the signing of the contract for Power of Siberia, this project was also carried out. As for long-term prospects, this involves connecting the unified gas supply system, which was created over the course of more than half a century, with the Power of Siberia gas pipeline and Sakhalin-Khabarovsk-Vladivostok," Polous said.

In addition, in the current economic situation Gazprom has added a new area of diversification to its strategy - the settlements currency, he said. "An agreement was reached at the Eastern Economic Forum to switch payment for gas supplies through the Power of Siberia gas pipeline to rubles and yuan," Polous said.

"The signing of a new contract with our Chinese partners and active work on new projects are clear confirmation of the fundamental axioms of the gas business. I'm referring to stable pricing mechanisms and the absence of regulatory barriers for the implementation of gas projects," Polous said.

After it increases gas shipments to 48 billion cubic meters per year - 38 bcm through Power of Siberia and 10 bcm in the Far East - Gazprom will probably become the largest supplier of gas to the Chinese market, he said.

"Taking into account the previously signed contract to supply gas under the Power of Siberia project, overall contracted amounts total 48 bcm. It is highly likely that after this amount of supplies is reached Russia could become the largest supplier of gas to China. And it's important that, while developing cooperation in the gas sector, Russia and China are not increasing mutual dependence to critical levels," Polous said.

The program to create a unified system of gas production, transportation and supply in Eastern Siberia and the Far East with a view to possible gas exports to China and other countries in the Asia-Pacific region - the Eastern Gas Program - was approved in September 2007 by Russia's then Industry and Energy Ministry. The government appointed Gazprom as the coordinator of efforts to implement the program.