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Gazprom to spend $38 billion on Chayanda development

MOSCOW -- Russia’s Gazprom is to throw over $38 billion behind the development of a gas field and associated pipeline to an LNG plant in the east of the country, a report claims.

The energy giant is to spend 770 billion Russian rubles ($24.47 billion) on building the pipeline from the East Siberian Chayanda gas field to Vladivostok on the Pacific coast, Reuters reported on Monday.

A further 430 billion rubles will be spent on developing the field, the news wire cited Gazprom chairman Alexei Miller as telling President Vladimir Putin on Monday.
This equates to a combined spend of 1.2 trillion rubles, or $38.13 billion.

Just over a month ago Miller promised a swift increase in the state-controlled company’s gas deliveries to the Pacific to “satisfy growing demand”.
Gazprom will soon deliver more gas to the Asia-Pacific region than it currently sends to its traditional export destinations in Europe.

The company recently signed a new memorandum of understanding with Japan’s Agency for Natural Resources & Energy covering co-operation between the Russian giant and Japanese companies for the construction and operation of the Vladivostok LNG plant.

Gazprom is planning to produce up to 10 million tonnes per annum of LNG at Vladivostok, with the plant due to come on stream about 2017 at a cost of between $7 billion and $10 billion.

On Monday Gazprom was reported to have applied for an extension to the licence for the Shtokman gas field in Russia’s Barents Sea, indicating it still believes the stalled project can fly.

An application to change the licence agreement has been submitted to the Federal Agency for Subsoil Usage, the agency’s deputy head Igor Plesovskikh told the Vedomosti news agency, adding it has yet to be considered by a working group set up to address the matter.

Gazprom recently decided to postpone development of Shtokman due to the high costs of financing the challenging Arctic project, estimated at $15 billion alone for the first phase that was originally due on stream in 2016.

The tripartite shareholder agreement involving partners Gazprom, Total and Statoil expired earlier this year.


 

10/29/2012

 

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