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Monday, September 17, 2007

China to OK Eastern Gas Program

Sep. 10, 2007 - Kommersant - Russia’s Industry and Energy Ministry has approved the Eastern Gas Program worth 2.4 trillion rubles. The dates of the fields’ development and exports will depend on results of Gazprom’s negotiations with buyers in China and Korea. China’s denial to accept the terms of Russia would kill the export component of the program.
Industry and Energy Ministry sanctioned September 3 the program of creating a unified system for gas/gas supply production and delivery in Eastern Siberia and Far East in view of potential exports to the markets of China and other states of Asian and Pacific region, Anatoly Yanovsky, chief of the energy policy department of the ministry, announced Friday.
The program provides for creating four centers of gas production located in Sakhalin, Yakutia (Chayanda field), Irkutsk and Krasnoyarsk territories. Each of them will have its own gas processing facilities.
Of all proposals to develop the fields with regard to potential exports, the most promising one is Vostok-50, which provides for exporting 50 billion cu meters of gas to the Asian and Pacific states by 2030. In this case, Sakhalin will be developed first and foremost. Development of Chayanda will start in 2016 and of Kovykta – no earlier than in 2017, provided no decision is passed to supply gas to the Unified Gas System.
The absolute priority is domestic needs, representatives of Industry and Energy Ministry said, specifying they will be met in any case. The definite dates of fields’ development and respective exports depend on the outcome of commercial talks between Gazprom, China’s CNPC and Korean COGAS. Russia presses for the equal yield from the gas exports, claiming the prices for Asian and Pacific states should depend on the prices for Europe. But the Chinese are yet unready to buy gas at Europe’s cost.

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