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NEW PIPELINE MAY DELIVER WEST SIBERIAN GAS TO CHINA - PUTIN(Interfax News Agency Via Thomson Dialog NewsEdge)A new gas pipeline system might be created to deliver West Siberian gas in addition to East Siberian gas to China, said Russian President Vladimir Putin. Putin told reporters in Beijing that a gas supply deal signed by Gazprom (RTS: GAZP) and China National Petroleum Corporation (CNPC) provided for the delivery of gas from both Western and Eastern Siberia. "Western Siberian supplies would be easier and faster," he said. For this to happen, "the possibility of creating a new pipeline transport system loosely called the Altai system via Russia's western border with China is envisaged," he said. Putin said there were "no questions" about the Eastern route. "This is the second phase in the development of our energy cooperation," he said. Russia and China already know what gas supply volumes they can expect via both the Eastern and Western routes, Putin said. "This about 30-40 billion cubic meters (bcm) of gas per year. There are enough resources in both Eastern and Western Siberia for this," he said. Russia may start supplying gas to China in 2011, Gazprom CEO Alexei Miller said after signing a protocol on supplies of Russian natural gas to China in Beijing. The protocol contains the main agreements on timeframes, volume and routes for gas deliveries and the principles for setting up a price formula, the Gazprom press service said. The supplies will be madethrough a single export channel, the press service said. "The first supplies will take place in five years," he said. Asked by journalists about the price formula for Russian gassupplies to China, Miller said that the formula is based on the cost of hydrocarbons in the Asia region. He said that this means the price for oil and oil products. He said that the first supplies of Russian gas to China would more than likely be carried out from fields in Western Siberia. "The most convenient route is the west, as major investment will not be needed for the volumes set down in the protocol," Miler said. "The resource base for the western route is gas fields in Western Siberia," he said. A source in the Russian delegation said that this pipeline would cost about $10 billion. Miller said that the large Kovykta field, belonging to Russian- British TNK-BP, located in the Irkutsk region, is the most suitable to supply oil via the eastern route. He said that Russian would build the pipelines independently. A source in the Russian delegation said that both the western and the eastern pipelines to export Russian natural gas to China would be connected with the West-East gas pipeline in China. Miller is certain that Gazprom has sufficient resources in Western Siberia to meet demand in Europe, Russia and China. "Volumes are sufficient to meet all our contracts for Western Europe. Europe was and will be the main market for Gazprom, we are talking about diversifying our supplies, today the timeframe and volume for Gazprom to enter the Chinese market have been set. These will be very large supplies," he said. The source in the Russian delegation said that the first supplies would in fact come from current fields in Western Siberia. However, subsequently fields along the pipeline route would be connected up. The source also ruled out the possibility of shortages of gas resources for any Gazprom supply route. Miller also said that cooperation between Gazprom and China will not only involve gas supplies, but also gas exploration and production. |