A decree to begin the practical implementation of Gazprom’s project to supply natural gas to China has been signed by the Russian company’s CEO, Aleksey Miller. It says actual gas supplies will start from 2019.
“Starting from today, all the departments and subsidiaries of the company have begun to realize the project,” says a Gazprom press release Friday.
Gas production at Chayanda deposit in Russia’s Republic of Yakutia, which will be the source of the gas for the projecе, is scheduled to begin in late 2018 year, Gazprom said.
According to the company, by that time the section of the Power of Siberia pipeline connecting Chayanda with the town of Blagoveshchensk on the Chinese border will be completed.
Gazprom also expects the start of test production of gas at Chayanda in 2014, it will be supplied to the Eastern Siberia-Pacific Ocean pipeline from 2017.
The construction of the first line of the Power of Siberia pipeline leading to China will begin next year as well, the statement added.
Addressing the International Economic Forum on Friday Vladimir Putin said the gas fields which will be used in the Chinese project are “underestimated” and hold a lot more than the stated 3 trillion cubic meters of natural gas.
“This deal is for 30 years, while I think there’s enough supply for 50 years,” the Russian President said at the International Economic Forum in St Petersburg.
On Wednesday, Gazprom signed its biggest deal in history, a $400 billion 30-year contract under which the company will supply 38 billion cubic meters of gas to China per year.
After the signing ceremony Miller said the Chinese contract price will remain a "commercial secret", butmarket analysts have been speculating it could $350 per 1,000 cubic meters. However, the head of the company’s export arm, Aleksandr Medvedev said it was more.
The deal involves infrastructure investments of more than $70 billion from both sides becoming the world's largest construction project.
Russia will provide $55 billion up front and China $22 billion for construction of pipelines within their borders.
In 2013, China consumed about 170 billion cubic meters of natural gas and is expected to consume 420 billion cubic meters per year by 2020.