Between East and West

On March 18, messages appeared - with links to anonymous sources - that Gazprom is postponing its grandiose project “The Power of Siberia” in a long box
Rumors about the cancellation of the construction of the pipeline to China have a rational basis. After a hype around the conclusion with the Chinese, a grandiose contract for the supply of East Siberian gas worth $ 400 billion in May of Gazprom suddenly realized that it was not able to fulfill the promised on time and in the right amount.

Firstly, even if Gazprom really builds a magistral gas pipeline in a length of 4 thousand km in China by 2018, as he announced, he also needs to develop the Chayanda field in Yakutia and Kovyktinskoye in the Irkutsk region, so that they can provide the export of gas exports under a contract-38 billion m3 per year. It is hardly possible to do this in such a short time. The schedules drawn up by the company's planks show that in 2018 the first gas of new projects will reach the shores of the border Amur only in an annual volume of 4.5 billion m3, and to increase the export flow to at least 30 billion m3 a year another ten years of intensive work and $ 8-9 billion of annual investment.

Secondly, for gas export through the pipeline it is necessary to extract helium and other components from it, and Gazprom also does not have time to build gas processing capacities in the Amur Region. In addition, the main equipment for such an enterprise should have been purchased abroad, but the sanctions regime make its receipt extremely difficult.

The ghostly of promises on the “power of Siberia” was one of the reasons that Gazprom and the Russian leadership began to harden the Chinese intensively, persuading them to conclude a new contract - this time to receive gas from the north of Western Siberia, from existing crafts. The trouble is that the Altai highway, although it should be much cheaper than the East Siberian gas pipeline, China is completely unnecessary and not profitable. If in the east Russian gas could enter the densely populated provinces of the PRC, in the west of the market there is no market for him. To use Altai, the Chinese will have to build their gas pipeline east several thousand kilometers long ...

Gazprom has several solutions to this problem, although they are all not too profitable. If it is possible to insist on an agreement on Altai, then Beijing will certainly require some compensation. This can be a huge discount in the price of supplies, the release of the project from taxes, the financial participation of Gazprom in the continuation of the highway in Chinese territory or even the right to develop Russian gas fields - or all this is together.

A temporary exit of the situation may be the sending of gas to China not from Eastern Siberia, but from Sakhalin, where Gazprom expects to start the production on the Kirinsky block of the Sakhalin-3 project. To do this, you will have to forget about the construction of an enterprise for the production and export of liquefied natural gas in Vladivostok - another widely advertised venture of a gas monopolist, as well as increase the power of the gas pipeline from Sakhalin to Vladivostok, where so far, instead of 14 compressor stations, only one has been mounted.

In any case, the organization of Russian gas exports to China, which in the Kremlin is considered a geopolitical task of great importance, will cost a lot, especially in view of the intense financial situation in Russia. Judging by the economic calculations of Gazprom experts, gas supplies are not excluded at a price that will actually be lower than the cost. And the Chinese, monopoly consumers at the far end of the transport infrastructure worth a hundred billion dollars, will be able to dictate any conditions to the supplier.