A Review of the Nigerian Energy Industry

Gazprom yet to budget for China gas pipeline in 2014 – Report

Gazprom17 December 2013, News Wires – Russia’s biggest natural gas producer Gazprom has not included funding for the construction of a gas pipeline to China and the development of a gas field to supply it in its initial 2014 investment programme, local media reported on Tuesday.

Russian news agency Itar-Tass and business daily Vedomosti cited company sources as saying Gazprom had not yet budgeted for the Power of Siberia gas pipeline and the Chayanda gas field development because the company had so far failed to reach a pricing agreement with China.

Gazprom declined immediate comment, but a source at the company, when asked whether the company had failed to budget for the pipeline, said: “Looks that way.”

The company had planned to finalise the agreement with China by the end of the year, but Vedomosti quoted a Gazprom source as saying the deadline had been pushed back to January-February.

Gazprom usually increases its investment programme during the course of the year.

The deal, under which Russia would ship 38 billion cubic metres of gas annually to China, is crucial for Gazprom, which is trying to diversify supplies away from Europe, where countries are trying to wean themselves off Russian gas.

Gazprom has earmarked almost $40 billion to build the 4,000 km-long (2,500 miles) Power of Siberia and the development of eastern Siberia’s Chayanda field. Last month, Interfax news agency quoted a Gazprom source as saying the company planned to spend 806 billion roubles ($25 billion) on investment next year, 16 percent less than originally planned.

– Reuters

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