Russian gas – the way to China

(pic. 9.1 – Russian gas will go to China)

(pic. 9.1 - Russian-Chinese relationships
in the field of oil)

Russian gas will go to China. That was a result of successful negotiations between Russian state-owned Companies «Rosneft» and «Gazprom» and Chinese state-owned Company CNPC. According to signed memorandum there will be provided deliveries of crude oil and products refined from this raw material to China.

According to the announce of Vladimir Putin, Russia is ready to start construction of «Altay» gas pipeline and general gas deliveries to China will compose 60-80 billion cubic meters of gas per year. There are two supply routes exist: from Eastern and Western Siberia. The meeting in Peking confirmed the intention to realize a strategy of diversification in the field of power engineering.

However, the signature under the main contract has not been put yet – there are expected longstanding negotiations concerning the order of price calculation for hydrocarbons. Lead time for supposed deliveries is thirty years. Final contract is planned to be signed in the end of current year.

Natural gas will compose important part of the deliveries. Future transportation of 60-80 billion cubic meters per year will be the responsibility of «Gazprom». «Rosneft» will be responsible for the export of crude oil ensuring to increase the volume of deliveries that composes today about 15 million tons.

In spite of affirmations of the President of Russia about sufficiency of sources in Eastern and Western Siberia, there are some doubts exist about the possibilities of Russian side in the future to carry out obligations according to previous export contracts.

«Gazprom» will not manage – this is a keynote of these doubts. Some experts and power engineering agencies consider that deliveries of gas to Europe and Asia will cause the lack of exported raw materials and violation of contract obligations. This forecast is confirmed by insufficient under construction and existing capacities (with the focus on deposit occurrences in Western Siberia) and volumes of geological prospecting works.

Unfortunately, that means unmirthful prospects of the main gas supply developments inside Russia where the problem of lack of gas pipeline branches is currently essential.