he 1,865-mile (3,000-km) Power of Siberia $9 billion gas pipeline is set to become the longest transmission pipeline, east of the Ural Mountains, with its first delivery in mid-December. It will transmit 61 Bcm of natural gas a year from Irkutsk and Yakutia to Russia’s Far East, bringing vital energy for the economic development of the Russian side of the Amur River and onward.
The pipeline also introduces an additional source of gas to China, providing feedstock for planned gas-generation plants and helping reduce the country’s dependence on coal. By 2025, the Power of Siberia will have honored its $400 billion contract, signed in 2014 between Gazprom and Chinese government-owned CNPC, to supply 38 Bcm a year for 30 years, to in that nation’s north east.
The chinese market
For China, the pipeline will provide an additional source of gas to current pipeline supplies from Central Asia, or by tanker from Australia, Indonesia, Qatar and the United States.
For Russia, the Power of Siberia opens access to a new, large and growing market, allowing Gazprom to reduce its dependence on slowly growing Europe. It will also better protect Gazprom against future economic sanctions imposed by Washington. But, unlike with LNG traders who can exploit Asian and Atlantic spot markets, the price of Gazprom’s piped-gas to China is fixed.