Row may stall Russian gas supply

PUBLISHED : Wednesday, 11 July, 2007, 12:00am
UPDATED : Wednesday, 11 July, 2007, 12:00am

A top Russian energy official warned yesterday in Beijing that scheduled exports of natural gas to the mainland might be delayed if companies from both countries could not agree on pricing for two pipeline projects.

Russian Industry and Energy Minister Viktor Khristenko said his country was expected to supply 68 billion cubic metres of natural gas to the mainland before 2020 if the scheduled completion dates of both projects were met.

One project - the western line - is due to pipe gas from Russia's Western Siberia to the Xinjiang Uygur Autonomous Region by 2011 and needs to be finalised by the end of this year, according to Mr Khristenko. The west line, where infrastructure is well developed, will transmit 38 billion cubic metres of natural gas.

He said terms for the eastern line, which would supply 30 billion cubic metres of natural gas from Gakhalin to the mainland's northeast by 2016, needed to be hammered out by next year. 'But the gas supply will be postponed if the companies cannot reach agreement within the planned timeframe,' the minister said.

Russia's Gazprom has been in talks with China National Petroleum Corp for months, but without results. Reports said the parties could not agree on a price.

Mr Khristenko admitted the parties had disputes but said none of the outstanding issues were fundamental. The three basic factors in the projects - Russia's natural gas resources, the mainland market and the facilities and infrastructure of both countries - had long been in place, he said.

Mr Khristenko also said construction would begin next year on an offshoot to the mainland of the East Siberia Pacific Ocean pipeline, which would supply 15 million tonnes of crude oil per year at the end of the first stage.

In the second stage, the designed supply capacity would be 30 million tonnes a year.