It is unclear when the government will come up with the final decision on access to the Power of Siberia pipeline. It was reported in July, that the government might allow independent gas producers to export gas from new fields in Eastern Siberia and the Russian Far East. Gazprom might buy gas from independents at the export netback price. The independents might also be obliged to construct new gas transport infrastructure.
To recap, under current legislation, only Gazprom is allowed to export pipeline gas. Rosneft is among those claiming access to the Power of Siberia pipeline, which is at the initial stage of construction, in order to export pipeline gas to China. In particular, Rosneft President Igor Sechin has insisted on forming a consortium to construct the pipeline, likely targeting access to export capacities (18bcm out of total 64bcm capacity).
Previously, China National Petroleum Corporation had agreed to provide Gazprom with a prepayment of USD 25bn as part of the agreement between the two parties; however, the terms of this prepayment, including the cost of debt and time schedule, are unclear. The prepayment amount is close to 45% of the official estimate for the total capex programme (USD 55bn) and 35% on our estimates for the programme’s costs (USD 72bn).
Gazprom agreed to supply China with up to 38bcm of gas per year for 30 years. First gas is to flow to China in 2019.