Putin breaks ground on Russia-China gas pipeline, world's biggest

[Butifldrm]

Putin breaks ground on Russia-China gas pipeline, world's biggest

Published time: September 01, 2014 10:01 
Edited time: September 01, 2014 14:27

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September 1, 2014. Russian President Vladimir Putin (RIA Novosti / Alexey Nikolsky)

 

 

 

Russian President Vladimir Putin and Chinese Vice Premier Zhang Gaoli have launched the construction of the first part of Gazprom’s Power of Siberia pipeline - which will deliver 4 trillion cubic meters of gas to China over 30 years.

“The new gas branch will significantly strengthen the economic cooperation with countries in the Asia-Pacific region and above all - our key partner China,” Putin said at the ceremony outside the city of Yakutsk - the capital of Russia's Republic of Yakutia on Monday.

Both President Putin and Vice Premier Zhang Gaoli signed the freshly-welded pipeline in a time-honored Russian tradition. The 'Power of Siberia' was welded together by workers from Chayanda gas field, overseen by CEO Aleksey Miller.

"Gazprom is always a reliable supplier of gas to its customers - which also applies to the ‘Power of Siberia," Miller said.

The 3,968 km pipeline linking gas fields in eastern Siberia to China will be the world's largest fuel network in the world. Both Putin and Vice Premier Zhang Gaoli have called the project the world’s largest construction project, as investment from both countries will be more than $70 billion.

“The gas pipeline ‘Power of Siberia’ will increase energy security and ensure Russia’s ability to fulfill export obligations,” Putin said in the opening remarks.

Read More: Russia and China seal historic $400bn gas deal

Starting in 2019, Power of Siberia will pump gas from Siberia to China’s populous northeast region as well as to Russia’s Far East. The Chinese side will start the construction of its part of the pipeline in the first half of 2015, the Vice Premier of China said.

Last year, China consumed about 170 billion cubic meters of natural gas and expects to consume 420 billion cubic meters per year by 2020. Europe still remains Russia’s largest energy market, buying more than 160 billion meters of Russian natural gas in 2013.

 

Gas resources exploration and gas transmission system formation in Eastern Russia (Source: Gazprom)

 

“Once we create a gas pipeline network here in the Far East and Siberia, we will be able to connect European pipeline system to the East. And this, in terms of export opportunities and expanding Russia’s ‘gasification’, is very beneficial. Depending on the situation in world markets, we can more effectively implement gas flows- either more to the West or to the East,” Putin told students at North-Eastern Federal University earlier on Monday.

Running from the Chayanda gas field in the Republic of Yakutia, the cost of construction is estimated at more than $20 billion (770 billion rubles), which includes other investment in the region of $7.5 billion (283 billion rubles). Russia’s largest steel pipeline manufacturer, TMK, will provide materials for the project.

The gas pipeline will become a common transit center for gas production centers in the Yakutia and Irkutsk regions.

The first stage of the project will be to transport gas from the Chayanda deposit in Yakutia and connect to the town of Blagoveshchensk on the Chinese border. The 968 km pipeline should be completed by 2018.

 

September 1, 2014. Russian President Vladimir Putin, right, at the ceremony marking the joining of the first link in the Power of Siberia main gas pipeline, held at Namsky Highway near Us Khatyn village. Gazprom Board Chairman Alexei Miller, right. Vice Premier of the People's Republic of China Zhang Gaoli, left (RIA Novosti / Alexey Nikolsky)

 

The Chayanda field, which will begin production in 2015, is estimated to have reserves of 1.2 trillion cubic meters in gas and 93 million tons of liquid hydrocarbons. Each year the field is expected to produce up to 25 billion cubic meters of gas and at least 1.5 million tons of oil.

Putin also said that China can become a shareholder in the Vankor oil and gas fields in the Krasnoyarsk region in Eastern Siberia. China will enter into a strategic relationship with Rosneft, Russia's largest oil company, which owns the field.

The area is estimated to hold reserves of 520 million metric tons of oil and 95 billion cubic meters of natural gas. It has been in operation since 2009 and last year produced 21.4 million tons of oil and oil condensate.

“We generally take a very careful approach to the approval of our foreign partners, but of course, for our Chinese friends there are no restrictions,” Putin said.

In May, Russia's state-run Gazprom signed a 30-year gas deal with China’s CNPC valued at $400 billion.

 

 

http://rt.com/business/184176-russia-china-gas-siberian-power/

 

It appears there is going to be some serious money traded on this deal.  No wonder they came out with this news first:

 

Posted 27 August 2014 - 08:34 PM

Business Russia’s Gazprom Neft to Sell Oil for Rubles, Yuan

© Photo Gazprom neft

12:16 27/08/2014

MOSCOW, August 27 (RIA Novosti) - The Russian oil company Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers, the Russian business daily Kommersant reported Wednesday.

The Russian government and several of the country’s largest exporters have widely discussed the possibility of accepting payments in rubles for oil exports.

Last week, Russia began to ship oil from the Novoportovskoye field to Europe by sea. Two oil tankers are expected to arrive in Europe in September. According to Kommersant, the payment for these shipments will be received in rubles.

Gazprom Neft will not only accept payments in rubles; subsequent transfers via the ESPO may be paid for in yuan, the newspaper reported.

According to the newspaper, the change in currency was made because of the Western sanctions against Russia.

In March, in response to Crimea’s reunification with Russia, the United States and the European Union introduced a number of targeted sanctions against Russia.

As the Ukrainian crisis escalated, the United States introduced several new rounds of sanctions targeting Russia’s defense, energy and banking sectors, and persuaded its allies to blacklist several Russian citizens and companies.

As a protective measure, Russia decided to avoid making its payments in US dollars, which can be tracked and controlled by the United States government, Kommersant reported.

Gazprom Neft gained control over the Novoportovskoye field in 2012. The field’s recoverable reserves exceed 230 million tons of oil and 270 billion cubic meters of gas. It is located in the Arctic and is part of the Yamal-Nenets Autonomous District.

http://en.ria.ru/bus...ubles-Yuan.html

 

Read more: http://dinarvets.com/forums/index.php?/topic/185364-the-nail-in-the-petrodollar-coffin-gazprom-begins-accepting-payment-for-oil-in-ruble-yuan/#ixzz3C7L0uSzb

[FlyHi]

I'm glad Putin was breaking ground and not wind

 

Even if gas is the sought after by-product