The #Russia/#china Energy Partnership Just Got Stronger, Thanks To The "Power Of Siberia" #midstream #pipeline

By 29th June 2015 Industry News No Comments

On Monday, China officially started construction of a huge pipeline to import hundreds of billions of dollars worth of Russian natural gas. The so-called “Power of Siberia” pipeline is the end result of a $400 billion, 30-year gas supply agreement inked by Russia’s Gazprom and China’s CNPC last year.

On Monday, Russian Prime Minister Dmitry Medvedev and Chinese Deputy Prime Minister Zhang Gaoli took part in a groundbreaking ceremony for the pipeline via a video conference call.

Russian Prime Minister Dmitry Medvedev

Medvedev said that the 2,485 mile pipeline would be completed “on time and in full,” with gas deliveries to start in 2018, according to the Interfax report.

The gas supply agreement was inked two months following Russia’s annexation of Crimea from Ukraine. This precipitated a confrontation with the United States and Europe that eventually led to Western sanctions on Russia’s financial and energy sectors.

Russian pipelines have traditionally transported gas to Europe- Gazprom’s main export client- and provides over half of the state-run company’s revenues. Europe receives about a third of its natural gas from Russia.

The Power of Siberia project; Credit: siberiantimes.com

Medvedev also said at a news conference that he hoped China and Russia would reach an agreement on increasing Russian gas supplies to China through Russia’s Altai region in the near future.

Russia is seeking to divert more natural gas to Asia via the Power of Siberia project and another pipeline to be constructed in Western Siberia with Chinese participation.

Monday’s official announcement comes after Gazprom last month said that construction on the Chinese section of the pipeline had already started.
Source: Industry News {$excerpt:n}