Russia set to tap gas field hit by US sanctions to supply its rival – media

Russian energy giant Gazprom may tap its huge natural gas deposit off Sakhalin, which is under US sanctions, to provide China with blue fuel under a recently signed deal, Reuters reported on Tuesday, citing sources.

According to people familiar with the issue, gas may come from the fields, including the Yuzhno-Kirinskoye, which Washington hit with sanctions in 2015 over the crisis in Ukraine.

Yuzhno-Kirinskoye is Gazprom’s largest natural gas deposit in the Far East, with reserves amounting to 711.2 billion cubic meters (bcm) of natural gas and 111.5 million tons of gas condensate. It is set to produce 21 bcm of gas per year. The deposit also contains oil, and the US sanctions are related to the exploration for, or production of, oil or gas in Russian deepwaters. The restrictions prevent foreign companies from tapping hydrocarbons at such fields.

Last week, Gazprom and China’s National Petroleum Corporation (CNPC) announced their second major long-term agreement for the supply of 10 bcm of natural gas from the Russian Far East. Gazprom said that after the project reaches full capacity, the volume of Russian pipeline gas supplies to China via the Far East route will reach 48 billion cubic meters per year (including deliveries via the Power of Siberia gas pipeline).

According to brokerage Sova Capital, quoted by Reuters, gas for the deal with China could come from the Kirinskoye field, “or more likely the Yuzhno-Kirinskoye field, which should launch in 2023 or 2024.”

“This will be Yuzhno-Kirinskoye, no doubt about that,” one of the sources said.

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