China, Russia begin construction of $5 bn gas pipeline
September 1, 2014, 9:17 am

File photo of gas treatment unit at Kovyktinskoye field in eastern Russia [Image: Gazprom]

In May this year, China and Russia had signed a mammoth $400-billion gas supply deal securing the world’s top energy user a major source of cleaner fuel. Russia will now supply China National Petroleum Corp (CNPC) with 38 billion cubic meters (bcm) of natural gas a year for 30 years.

Russian President Vladimir Putin and Chinese Vice Premier Zhang Gaoli were present at the launch on Monday.

“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.

Zhang flew in from Moscow to Yakutsk, the capital city of Russia’s Sakha Republic, Sunday evening to attend the launch.

Pipe-welding of the ‘Siberia Power’ pipeline begins on Monday. This marks the opening up a new market for Moscow as it risks losing European customers over the Ukraine crisis.

The Russian stakeholder of the pipeline Gazprom estimates that total investment in the project could exceed $5 billion.

“Without any exaggeration, we are launching a large-scale strategic project on the global level. It is meant to stimulate the development of Eastern Siberia and the Far East and increase Russia’s energy security as a whole. The new gas pipeline will significantly strengthen economic cooperation with the governments of the Asia-Pacific region and, first and foremost, with our key partner China,” Putin said on Monday.

“We are launching the world’s biggest construction project. There will not be anything bigger in the near future,” he added.

Russia plans to invest $55 billion in exploration and pipeline construction up to China, and CNPC said it would build the Chinese section of the pipeline.

Gazprom Chairman Alexey Miller said Saturday that the gas supply contract was just a beginning of bilateral cooperation in the field of natural gas and that the two countries will further strengthen their energy partnership.

The Russian part of the pipeline will link the Kovyktin and Chayandin gas fields in Siberia with the eastern port city of Vladivostok, covering a total distance of nearly 4,000 km.

 TBP and Agencies