The Russian state-run natural gas monopoly Gazprom has moved to control natural
gas resources in the country's vast eastern regions by taking over new gas
deposits and building new gas pipelines.
In late August, Gazprom argued that the Chayadinskoye deposit lacked sufficient
reserves to fill the Yakutiya-Vladivostok pipeline and asked the government to
grant four deposits (Srednetyungskoye, Sobolokh-Nedzhelinskoye,
Tas-Yuryakhskoye and Verkhnevilyuchanskoye) with combined reserves totaling 500
billion cubic meters (bcm). The gas giant also sought tax breaks in the Russian
far east, including zero gas
export duty that would total US$4.5 billion annually.
Gazprom's ambitious plans to develop a new system of gas-producing centers and
pipelines in the region include a gas pipeline to be built from the
Chayadinskoye field in Yakutia to Khabarovsk. Gazprom expects to start
production at the Chayadinskoye deposit in 2016, and to eventually raise gas
output there up to 30 bcm per year.
In recent years, Gazprom has repeatedly pledged to take over the largest gas
fields in Eastern Siberia and the Russian Far East. Hence, it has tried to
expand its presence in all four future gas production centers: Sakhalin,
Yakutia, Krasnoyarsk and Irkutsk regions. The Russian media noted that Gazprom
was keen to monopolize nearly all natural gas resources in the Russian Far
East.
Pursuing its bid to control Sakhalin-3, Gazprom appeared to ignore Prime
Minister Vladimir Putin's invitation to Shell to join the project, Nezavisimaya
Gazeta suggested on August 25. On August 22, Gazprom's deputy CEO Alexander
Ananenkov met President Dmitry Medvedev's envoy in the region, Viktor Ishayev,
and sought his support, arguing that the Sakhalin-3 gas was needed in order to
supply domestic consumers via the Sakhalin-Khabarovsk-Vladivostok pipeline, the
daily wrote.
In July, Ananenkov announced that Gazprom secured licenses to develop the West
Kamchatka offshore gas deposits on July 7 and the Sakhalin-3 license on July
22. He also pledged to cooperate with the state-run oil giant Rosneft to
develop the West Kamchatka Koryakiya-1 and Koryakiya-2 gas deposits. In January
2004, the Russian government annulled the results of the Sakhalin-3 tender,
which was won by a consortium led by ExxonMobil in 1993. Gazprom has long
lobbied to join the Sakhalin-3 project and argued that gas production could
start by 2013-2014.
To highlight the importance of Gazprom's Far Eastern expansion, known as its
"Eastern Program", the inauguration of its latest project was attended by the
country's top officials. Prime Minister Vladimir Putin announced in Khabarovsk
region on July 31 that the Sakhalin-Khabarovsk-Vladivostok pipeline launch
marked the creation of a new gas industry hub in the Russian Far East. Russia's
Far Eastern and East Siberian regions are expected to produce up to 150 bcm per
year by 2020, he said.
Putin said that the new deposits are due to supply fuel and feedstock for major
domestic energy and gas processing projects. The
Sakhalin-Khabarovsk-Vladivostok 1,800-kilometer pipeline will also target
export markets in Asia-Pacific eventually, he explained, while expressing his
confidence that the first stage of the pipeline project would be completed by
2011. Ananenkov has told Putin that Gazprom aimed to raise the pipeline's
capacity from 7 bcm per year to 28 bcm per year at the next stage. Ananenkov
also pledged to raise gas production up to 70 bcm per year in Sakhalin, 53 bcm
in Yakutiya, 48 bcm in Irkutsk region and 35 bcm in Krasnoyarsk region by 2030.
The existing Sakhalin-Komsomolsk-on-Amur-Khabarovsk pipeline has limited
capacity. When built in 1987 it had a capacity of 4.5 bcm per year, but it has
never pumped more than 1.5 bcm per year. This pipeline was eventually extended
to Khabarovsk, but its actual capacity did not exceed 2 bcm per year.
The new Sakhalin-Khabarovsk-Vladivostok gas pipeline was launched despite
environmental concerns. Environmentalists warned that the project would notably
affect adversely the Khasan natural reserve. They also argued that the
pipeline's planners ignored a potential earthquake risk in the area.
Gazprom has estimated local demand in Khabarovsk region at 3 bcm per year,
4.5-5 bcm in Sakhalin and 5 bcm in Primorie region. Nonetheless, it pledged to
create a new system of gas pipelines, notably the
Sakhalin-Khabarovsk-Vladivostok pipeline, to funnel gas from the Sakhalin
offshore deposits with a capacity significantly exceeding local demand.
Therefore, despite its official promises to prioritize domestic customers,
Gazprom's Eastern Program was aimed at offering Russian natural gas to East
Asian importers at international prices. Gas from Yakutiya could also be used
for exports to Asia-Pacific countries, Ananenkov announced in July. He also
pledged to start construction of Yakutiya-Vladivostok gas pipeline in 2012 as
part of Gazprom's Eastern program.
Meanwhile, Gazprom also conceded that its project to build a gas pipeline to
China remained stalled. In early August, Ananenkov said that supplies via the
Altai pipeline would not start in 2011 as planned earlier. Three years ago,
Putin also promised to export up to 40 bcm of Russian gas to China via a
6,700-kilometer $10 billion Altai pipeline. Moreover, in March 2006, Gazprom
and the China National Petroleum Corporation (CNPC) signed a memorandum on the
delivery of Russian natural gas to China from 2011, which was a follow-up to
the partnership deal signed in October 2004.
However, the Altai pipeline project became even less feasible after CNPC agreed
to import 2.25m tons of LNG annually from Australia's Gorgon LNG project. The
$41 billion LNG deal highlighted Gazprom's limited clout as a natural gas
supplier in the Asia-Pacific. Simultaneously, the economic viability of the
Yakutiya-Vladivostok and the Sakhalin-Khabarovsk-Vladivostok pipelines as major
export routes also now appears to be questionable.
Dr Sergei Blagov was a newswire reporter prior to working as a
Moscow-based independent researcher and journalist. He spent nearly seven years
reporting from Hanoi, Vietnam, between 1983 and 1997.
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