For the sake of «The Power of Siberia»: will we unfreeze?

The prices for gas inside RF should be unfreezed, and as soon as they “thaw out” - increased. This is an opinion of Gazprom management.

(pic. 38.1 – «The Power of Siberia» gas pipeline)

(pic. 38.2 – Rates increase for gas)

The reason of this request from the corporate is a construction of «The Power of Siberia» gas pipeline. Unfreezing of rates for gas, as one of the ways of the government supports, will allow to carry out a project of gas transmission system which transport gas from Yakut and Irkutsk gas recovery centers to China and to the Far East of Russia. This idea sounded during the press-conference about financial and economical policy of Gazprom.

There was also noted in the Corporate that it was necessary to have the following image on domestic market: rates increase for gas exceeds inflation – for 2% (in 2015), for 3% (in 2016), for 4% (in 2017). Therefore the prices for gas will be increased for 8-10% every year.

Very recently Victor Zubkov, the chairman of the board of directors in the gas giant, addressed to Dmitry Medvedev offering to raise the rates for gas in 2015 to make their increase 3-4% exceed inflation. There was underlined that only rates indexation which exceeds inflation would allow Gazprom to finance «The Power of Siberia» program.

«The Power of Siberia» gas pipeline will be laid along Eastern Siberia – Pacific Ocean highway (operating main oil pipeline). That will give the possibility to improve expenses for the power supply and infrastructure. The total length of the gas-transport system will be about 4 000 km.

Putting into operation of Yakutia – Khabarovsk – Vladivostok gas pipeline (the first block of «The Power of Siberia», construction start – August’ 2014) is planned for 2017. Gas deliveries to China should provide branches of the gas pipeline in the areas of Dalnerechensk and Blagoveshchensk. Direct supplies of natural gas to China (the price of 30 years contract is 400 billion dollars) are supposed to start in 2019.