Neither China nor Russia needs the “Power of Siberia”. Putin personally needs this. When will the Power of Siberia gas pipeline be built?

Yesterday, Russian gas giant Gazprom celebrated its quarter-century anniversary. In honor of this, the day before, Russian President Vladimir Putin spoke in the Kremlin with the head of the corporation, Alexei Miller. The President noted the successes of Gazprom, which now operates in 34 countries around the world, and wished all the company’s employees further success.

In response, Alexey Miller spoke about the most important achievements of Gazprom, which currently ranks first among the world's 250 leading oil, gas and electricity companies. The Russian company owns 17% of the world's natural gas reserves.

One of Gazprom’s most important projects is the Power of Siberia gas pipeline to China. True, since it is not accompanied by the passions that burn around Nord Stream 2, less is known about it from the press. But two-thirds of the pipes have already been laid, and gas launch is planned for the end of next year.

According to the head of the holding, Gazprom has already laid more than 1,520 kilometers of gas pipeline. In fact, the Russian energy company has completed the construction of the linear part of the Power of Siberia from the Chayandinskoye field by 60%.

“And next year, on December 20, pipeline gas supplies will begin to the most dynamic gas market in the world - the Chinese market,” Miller noted.

To lay the gas pipeline, Gazprom received almost all the necessary large-diameter pipes (LDP). Currently, the corporation has 1.725 million tons of LDP at its disposal, which is equivalent to 2.144 thousand kilometers of single-strand pipeline. But, according to plans, the total length of the first stage of the pipeline (from the Chayandinskoye oil and gas condensate field to the border with China) is 2,158 thousand kilometers.

Construction is progressing clearly ahead of schedule. At the most key site of the highway (at the border crossing on the border with China), two starting pits were dug on the Chinese side and two receiving pits on the Russian side. And at the end of 2017, a shield for the construction of the main line was launched from the Russian-Chinese border

Next year gas supplies to China will begin. In the first year of operation of the Power of Siberia, the Chinese will receive only 4.6 billion cubic meters, but in 2021 Gazprom intends to gradually increase capacity in order to reach the planned 38 billion cubic meters by 2025.

A gas pipeline to China is necessary, despite the problems in the Chinese economy and the large-scale crisis in the Russian one. This project could become a growth driver for the Far East

The Chinese economy is slowing. In mid-January, the National Bureau of Statistics of China published GDP data for 2015. The growth rate of the Chinese economy (6.9%) not only did not exceed the level of 2014 (7.3%), but also turned out to be the worst in the previous 25 years. The slowdown in the world's second largest economy has raised concerns about a possible reduction in China's energy consumption. Thus, according to the forecast of the International Energy Agency (IEA), in 2015-2020 the average annual growth rate of oil consumption in China will be equivalent to 2.6% - this is almost two times lower than in 2005-2014.

The expected decrease in energy consumption in China may cause a postponement of the start of gas supplies from Russia along the western route of the Power of Siberia-2 project, said Russian Minister of Economic Development Alexey Ulyukaev. , delivery times along the eastern route will not be changed, since contracts for the construction of its individual sections have already been concluded. Thus, last December, Gazprom and the China National Petroleum Corporation (CNPC) signed an agreement on the design and construction of the cross-border section of the Power of Siberia gas pipeline across the Amur River.

Gas demand in China

Critics of the project often cite the fact that gas plays a subordinate role in China’s energy balance: according to the US Energy Information Agency, in 2012 it accounted for only 5% of the energy resources consumed in the country, while the share of coal, oil and hydropower - 66%, 20% and 8% respectively. However, it is worth noting that in 2005 the share of gas was even smaller (2.6%). Over the past ten years, China has more than tripled its consumption of blue fuel - from 46.8 billion cubic meters. m in 2005 to 178.6 billion cubic meters. m in 2014, despite the fact that experts from the International Energy Agency in 2007 expected that gas consumption by 2015 would reach only 120 billion cubic meters. m.

Gas imports grew just as dynamically: having started purchasing liquefied natural gas in 2006 and pipeline gas in 2010, by 2013 China increased their total supplies to 51.9 billion cubic meters. m. Still in 2013, imports accounted for 32.1% of the gas consumed by China; According to the International Energy Agency, this figure will rise to 54% in 2030. That is why the demand will be ensured both for liquefied natural gas supplied to China, including from Qatar, Australia and Malaysia, and for natural gas that will come from Central Asia and Russia.

This scenario can be made realistic by the efforts of the Chinese government to combat environmental pollution resulting from the powerful industrial breakthrough at the turn of the 20th and 21st centuries: it will be impossible to solve this problem without abandoning the use of coal and increasing the consumption of environmentally friendly gas, which should lead to a reduction in harmful emissions. emissions into the atmosphere, and this in turn will give the Power of Siberia strategic importance not only for China, but also for the whole world.

Unprofitability of the project

Critics of the “Power of Siberia” project also point out that the construction of a gas pipeline to China will pay off only three decades after its start—this is the case, in particular, with Sergei Aleksashenko. It is worth noting here that projects of this kind rarely become profitable immediately after their commissioning: as a rule, the commercial effect from their implementation is achieved only after a long period. An example of this is the construction of the Urengoy - Pomary - Uzhgorod gas pipeline, which was built at the turn of the 1970s and 1980s with loans from European banks issued with proceeds from subsequent supplies of blue fuel to the countries of the Old World (gas-pipe deal). . Financial returns from this project were received after the collapse of the USSR, when Gazprom began to increase exports to the EU, which between 1990 and 2005 grew from 110 to 154.3 billion cubic meters. m - thanks to this, the company was able to compensate for losses from supplies to the former Soviet republics, which at that time were actually carried out by barter.

The construction of a gas pipeline to China can have approximately the same, albeit smaller-scale, effect. If this were different, then the construction of the infrastructure necessary for transporting blue fuel to the Celestial Empire would not have been carried out by the Central Asian states, in particular Turkmenistan, which in September 2013 concluded an agreement on the construction of the fourth line of the gas pipeline in the PRC, thanks to which by 2017 its total capacity will reach 80 billion cubic meters. m. Last December, Turkmenistan also began construction of a gas pipeline to India with an annual capacity of 38 billion cubic meters. m: within the framework of this project, a gas chemical complex will be built in the Balkan region of Turkmenistan to produce 386 thousand tons of polyethylene and 81 thousand tons of polypropylene per year.

Such projects are capable of generating profit in the long term - this is how they benefit from, for example, the large construction project in Sochi that foreshadowed the 2014 Winter Games and cost, according to the Olimpstroy Group of Companies, 1.524 trillion rubles. ($50 billion at the then exchange rate). Unfortunately, corruption risks during their implementation cannot be excluded. However, if the factor of corruption could be used to justify the refusal to implement investment projects, then in Russia it would be necessary to completely stop the construction of any capital facilities, be it roads, schools or hospitals.

Development of deposits in Eastern Siberia

The Power of Siberia project will contribute to the development of the Chayandinskoye (Yakutia) and Kovyktinskoye (Irkutsk region) gas fields - today there is no other way that would allow them to bring their resources to the market. These fields can become not only a resource base for the Vladivostok-LNG project, but also for gas chemical enterprises in the region, especially since the gas from Kovykta and Chayanda is rich in components used in gas chemistry, such as ethane and helium.

Confirmation of this is the agreement on the construction of the Amur Gas Processing Plant (GPP), signed by Gazprom and Sibur last July: an enterprise with an annual capacity of 49 billion cubic meters. m should be commissioned in 2025; the basis for its work will be the raw materials of the Yakut and Irkutsk gas production centers created by Gazprom as part of the Eastern Gas Program.

The gas processing plant, in particular, will include the world's largest helium production facility with a volume of at least 60 million cubic meters. m per year. The helium content in the gas of the Kovykta field is 0.28%, while exceeding even one hundredth of a percent indicates its industrial reserves. That is why the opening of the Amur Gas Processing Plant, which will operate on the Kovykta resource base, will open up wide opportunities for Russia to export helium to foreign markets and displace foreign competitors, including from the United States, as well as for its use in aviation, space, and medical and other high-tech industries.

Workplaces

The construction of the Amur Gas Processing Plant will employ 15 thousand people, and about 3 thousand jobs will be created at the enterprise itself. For the 800,000-population Amur Region, this would seem to be a drop in the ocean. However, we should not forget that the construction of the Power of Siberia gas pipeline and the construction of gas chemical enterprises will require the creation of road transport infrastructure, the development of which will also require labor. Thus, to supply equipment to the Amur Gas Processing Plant, the channel of the Zeya River will be deepened, and a highway and a railway line will be built.

In addition, the very progress of the gas pipeline project will force the federal government to take a closer look at the development of the Far East, which has received less attention compared to other Russian regions, such as the oil-rich and relatively close to the European part of the country Western Siberia or politically and economically unstable North Caucasus.

To implement these measures, political will is needed, which would arise under pressure from entrepreneurs demanding an environment favorable for doing business. Only large companies that will come to the Far East seriously and for a long time can create such pressure in Russian conditions: they will have to work in the region for more than one year, and therefore it will be in their interests to create conditions that would be beneficial not only to the “big companies”, but and "kids". An environment that will ensure the transformation of the Far East from a subsidized region into a donor one.

The builders of the Power of Siberia gas pipeline drilled a tunnel under the Amur on the border. Its length was almost 1300 meters and its width was about two meters. The main branch of the gas pipeline will be laid in the tunnel. Now the builders have to drill another passage under the border river - for a backup pipe. All work on laying tunnels was undertaken by the Chinese side. The builders have a wealth of experience in the construction of gas pipelines, but they found something to surprise specialists from the Middle Kingdom.

“I participated in the construction of four gas pipelines and complexes here, but this is the first time on such a project - under water and underground,” admits Xu Liang Liang, head of the construction department of the Oil and Gas Pipeline Department (PRC). “We use the best technologies, work according to international standards level, observing both Russian and our calculations and requirements. And we are grateful to your side for your cooperation and support. And therefore, everything is on schedule for us."

Builders drilled the first branch of the transboundary tunnel under the Amur in the vicinity of Verkhneblagoveshchenskoe. They will start the second one soon. Then the laying of pipes for the supply of Russian gas to China will begin. The construction of the receiving pits for the section of the main crossing, which will connect the domestic gas transmission system with the Chinese one, is being completed.

In parallel with the construction, arteries are being laid near Svobodny through which purified methane will be sent to the region and other regions of the Far East. Siberian gas is also expected in China. The construction of the cross-border tunnel is in full swing.

The first special equipment entered the vicinity of Verkhneblagoveshchenskoye at the end of spring 2017. Nowadays, industrial buildings and a mini-village for builders are already rising on the former wasteland. But the main thing is what you can’t see on the surface.

The length of the tunnel is almost 1,300 meters, the width is about two and a half meters. It lies under the river bottom at a depth of 20 meters. The main line will pass under the Amur, and there will also be a reserve line 50 meters away. This underwater crossing will connect the Chinese gas pipeline with the Power of Siberia.

The tunnel was drilled from the Celestial Empire and equipped within six months. A narrow-gauge railway is laid inside for the operation of technological transport. The tunneling rig has already been transported, where preparations are underway for launch along the second line. Chinese contractors took full responsibility for this.

During the construction of the cross-border crossing, the Verkhneblagoveshchensky checkpoint was specially created. A similar one operated in Jalinda, where several years ago an oil pipeline was also laid near the Amur. However, there are no special or simplified procedures at the border checkpoint.

All equipment necessary for construction is processed through the temporary import procedure; after the project is completed, the units will be returned to China. With the completion of the construction of the cross-border tunnel, the checkpoint will be closed.

Near the crossing in Verkhneblagoveshchensky, work is underway to build a gas measuring station. They expect to begin exporting Russian gas to the Celestial Empire in December 2019.

The agreement, which was signed five and a half years ago in the presence of Russian President and Chinese President Xi Jinping, provides for the transportation of about 38 billion cubic meters of gas per year.

As of January 1, 2017, Gazprom had already welded about 700 km of the Power of Siberia gas pipeline, through which Russia should supply gas to China. By the end of the year, another 600 km of route is planned to be laid, reports TASS. However, experts believe that gas supplies to China may be unprofitable for Russia and will hit the finances of Russians.

As of January 1, 700 km of gas pipeline had been welded and 490 km had been laid. By the end of the year, “the construction of more than 600 km is planned,” Gazprom board member Oleg Aksyutin told the publication.

Russia plans to transport gas to China from fields in Eastern Siberia: the Chayandinskoye field in Yakutia and the Kovyktinskoye field in the Irkutsk region. A branch line to the eastern regions of China will be built on the Russian-Chinese border near Blagoveshchensk (the Chinese city of Heihe is located across the Amur River). In addition, the gas pipeline will supply Russian regions with gas (via Khabarovsk to Vladivostok).

In 2017, Gazprom's investments in the gas pipeline increased from 76.162 billion rubles to 158.811 billion rubles.

In May 2014, a contract was signed between Gazprom and the Chinese oil and gas company CNPC for the supply of 38 billion cubic meters of gas to China via the “eastern route” annually for 30 years. The contract value is $400 billion. Gas supplies to China under the contract may begin in the period 2019–2021.

Sponsored by China?

The increase in construction costs may be offset by the federal budget or rising gas prices within Russia, Vedomosti fears.

Meanwhile, experts believe that the cost of the gas pipeline will not pay off. The Chinese have not agreed to buy Russian gas on Gazprom’s terms for more than 10 years. They are still demonstrating that they do not really need Russian gas, says Mikhail Krutikhin.

In his opinion, China will purchase gas at a price below its cost. “They clearly count on the fact that Gazprom, having built a gas production and gas pipeline system at state expense at a cost of more than $100 billion in an insane calculation at the mercy of a single buyer, will beg this buyer to take gas on any terms,” Krutikhin is quoted as saying by Russian Politics. .

If the construction of the gas pipeline is completed and China demands to sell gas at low prices, Russia has three options. The first is to accept all the conditions and supply Chinese consumers with gas at the expense of Russian taxpayers. The second option is to continue spending money and extending the “Power of Siberia” to the Pacific Ocean, where it is possible to build a gas liquefaction plant and enter the Asia-Pacific markets.

The third way is to build new pipelines. The analyst refers to the words of the President of the Russian Federation, who announced the possible connection of the Power of Siberia with the Gazprom network and the distillation of gas from Yakutia and the Irkutsk region to Europe. At the same time, Krutikhin noted that the cost of gas would be fantastic.

The former head of YUKOS, Mikhail Khodorkovsky, also spoke earlier about the unprofitability of the Power of Siberia project. In an interview with Vedomosti, Khodorkovsky previously stated that “at best, the project goes to zero.”

“We are essentially sponsoring Chinese industry. Strategically, the situation is even worse: China needs us precisely as a raw material resource... In a situation where the country has jeopardized its supplies to the West and my Chinese counterparties understand that I am now in a weakened position, I would never sign an agreement. I would wait - six months, a year. The situation has changed, Chinese counterparties understand that they are not the only ones for me, that I have the opportunity to supply no less profitably in other directions - oh! “at this moment you can talk,” Khodorkovsky explained.

A new construction project of the century - a pipe with a diameter of almost one and a half meters stretches confidently across all of Siberia, from Yakutia to Blagoveshchensk. In a year, the Power of Siberia main gas pipeline should be ready for operation - the contract concluded in May 2014 between Russian Gazprom and the Chinese National Petroleum Corporation (CNPC) provides for annual gas supplies of up to 38 billion cubic meters over 30 years and was estimated at the time of signing at 400 billion dollars. The Russian government still presents this contract not only as a profitable commercial project, but also as its great geopolitical victory.

However, there is a downside to “turning east.” Russian taxpayers will subsidize Chinese consumers, and in reality only the contractors of this construction will receive commercial benefits, he believes Mikhail Krutikhin, partner of the RusEnergy analytical agency.

In an interview with Siberia. Realities, Mikhail Krutikhin, an expert with 25 years of experience in the energy industry, explains why the Power of Siberia is not worth the money that Gazprom and the state are investing in the gas pipeline.

– In May 2019, according to official press releases, gas supplies to China via the Power of Siberia should begin. In your opinion, how realistic are these plans?

– I think that a more realistic date is around December 2019. We see how feverishly preparations for this date are going on. According to the shortest scenario, to a minimum extent, construction work is carried out on the linear part of the gas pipeline. Capacities are being created to prepare gas for pumping it further to China, since it is necessary to extract components from the gas that interfere with the supply of pure methane - in particular, it contains nitrogen (about 7%), helium and other components. New wells are being drilled and the Chayandinskoye field in Yakutia is being developed, which should become the base for gas supplies along this route. So, I think that by December 2019 they can achieve the minimum volume.

– Both the Chayandinskoye and Kovyktinskoye fields, from where gas will go to the Power of Siberia, have not yet been developed and have generally been explored relatively recently. Is Gazprom confident in them?

- Let's start with Chayandinskoye, this is the main, first field where gas will come from. According to all Russian norms and rules, you first need to develop an oil deposit in a field, because if you abandon the oil and immediately pump gas, the pressure will drop and the oil will remain in the ground forever.

Gazprom announced that it had allegedly developed a technology that allows gas to be withdrawn without the pressure in the underground oil reservoir dropping. I talked about this topic with geologists from the largest American oil and gas company, and they laughed at me. Such technology does not exist. Thus, Gazprom is violating all norms; it is leaving huge oil reserves in the ground in order to urgently begin exporting gas. This is the first according to Chayanda.

Second: this field at the very peak of production is not capable of producing more than 25 billion cubic meters of gas per year. This means that Gazprom's promise to supply 38 billion cubic meters per year to China cannot be realized on the basis of this field alone. It is necessary to connect to it a second large field, no longer in Yakutia, but in the Irkutsk region - Kovyktinskoye, which also still needs to be developed and an additional 800 km of pipeline must be built to connect Kovykta with Chayanda. Not yet.

Thus, if we say that gas will flow to China in December 2019, this means that the initial capacity of the entire system will be approximately 4-4.5 billion cubic meters per year. In order to increase the Power of Siberia to 38 billion cubic meters, it is necessary to extract 42 billion cubic meters per year from these two fields. The difference will be spent on isolating components from the gas; gas also needs to be spent on operating compressors at gas pumping stations. If you look at the charts prepared by Gazprom planners and economists, such production can be achieved approximately 10 years after the start of pumping gas to China. That is, it will be possible to reach the target figure not in 2019, but only in 2029.

– Is China happy with such a scheme?

– The Chinese position is generally very interesting, to put it mildly. For many years, the Chinese have resisted the entreaties of Gazprom, which intended to sell them gas along three routes at once. One - through Vladivostok, the second - through the "Power of Siberia", which was not yet called that way, and the third - through the Altai gas pipeline, which is sometimes called "Power of Siberia-2", from Western Siberia, where Gazprom's main gas fields are located.

It was planned to supply 68 billion cubic meters of gas along these three routes: 30 through Altai and Power of Siberia, and 38 remained to the Far East. The Chinese immediately said, sorry, we don’t need this gas, we are closing our gas balance without you. With great difficulty, year after year, we signed some framework agreements, memorandums of understanding, announced to everyone that we were about to come to an agreement, until, finally, during Putin’s visit to Shanghai in May 2014, we signed a document that 20 minutes before the signing it was called a “Memorandum of Understanding”. That is, he did not oblige him to anything. With great difficulty they persuaded the Chinese to call it a “contract”.

Other persuasion - to supply gas to the Chinese through the Far East, through the Altai gas pipeline - did not bring any results; the Chinese reject all these ideas. When I talked to Chinese specialists in Beijing last year, they told me confidentially: “You know, we are closing our gas balance without Russia, but we will need this Russian gas only in one case - if a difficult military-political conflict develops in the Pacific Ocean.” situation, and obtaining liquefied natural gas from other sources will be difficult or impossible. Then we will ask for gas supplies from Russia." That is, for them it is an emergency exit. And when we say that the Chinese are asleep and see that Russian gas will come to them, this is not true, this is empty propaganda.

– But in the Russian Federation, this contract, when it was concluded, was presented as a major geopolitical victory for Russia.

– This is empty, absolutely empty, propaganda that is not based on anything. Let's remember 2012: Gazprom prepared a justification for investments in the Power of Siberia, and at the end of this document it was said: yes, this project can be of commercial importance, but only if the price of gas included in it is increased by 50-70% .

They calculated the price of gas in three different versions: it was tied to the price of oil at 60, 75 and 90 dollars per barrel. And according to the investment justification made by Gazprom planners and economists, it turns out that even at the price of the most expensive oil, the project will not pay off even in 2048! This is not a commercial project at all.

Why does Russia need it? Let's see: Russia has a lot of gas, there is nowhere to put it, because in Europe, where all our gas pipelines are aimed, consumption is practically not growing. Liquefied natural gas - we are just, very timidly starting to do something here, and our liquefied gas is not commercially profitable. Or gas must be shipped in the harsh conditions of the Arctic, and then the state takes over the infrastructure, as in the Yamal LNG project. Or again we need to lay pipes somewhere. And where to? The only direction is China.

They desperately began to persuade the Chinese, not paying attention to commerce. What does it mean to “ignore commerce”? This means that the Chinese will buy gas at a price below the cost - the cost of production, the cost of pumping, plus operating costs and capital investments that need to be invested in this very “Power of Siberia”: in a gas processing plant, in a gas chemical plant and much more. As a result, the Russian taxpayer (Gazprom is, after all, a state company) will subsidize Chinese gas consumers.

When I try to imagine why this had to be done, I have only two options for the possible logic of those who made the decision. And the decision was made at the very top in the Kremlin. The first is window dressing: look, a gigantic geopolitical victory, we have opened a new route for the export of our gas. Nobody knows how much it cost. And the second motivation is to make money for the contractors who are building this gas pipeline. That's it, I don't see any other motivation. And contractors are known for the fact that their estimates are approximately 2.5-3 times higher than for the same work from other companies in other parts of the world.

– As far as I remember, the largest contracts were received, without competition, by Stroytransgaz JSC, which belongs to Gennady Timchenko, and Stroygazmontazh LLC, which belongs to Arkady Rotenberg.

– Timchenko, Rotenberg, all these guys. They have already distinguished themselves - they built the Sakhalin-Khabarovsk-Vladivostok gas pipeline: there is no gas at one end, and there is no consumption at the other end. The gas pipeline was built, billions of dollars were poured into it for some reason.

– Is Power of Siberia being built with budget money or with money from a state company?

– When this contract was signed in May 2014, Gazprom, already known for false statements, announced that the Chinese had agreed to co-finance the project and would invest $25 billion in the Power of Siberia. As it turned out, the Chinese did not promise anything and did not give a penny. That is, all the money is Gazprom’s money, and therefore Gazprom, which is now forced to spend money on useless, commercially unprofitable, unprofitable projects, over the past three quarters has found itself on the list of companies that produce losses instead of profits. Gazprom's current accounts have red numbers, not black ones.

– Only due to this investment program?

– These are gigantic construction projects with inflated estimates that will never be justified. These were the same politicized projects as Nord Stream 2, like the Turkish Stream - this whole business is not justified.

– In June 2014, there was a message that the president instructed the Ministry of Finance to “think about additional capitalization of Gazprom.” Has this idea come true?

– Not yet, this has not happened, the only thing is that Gazprom was promised exemption from some taxes on gas supplies through the Power of Siberia. Well, yes, again at the expense of Russian taxpayers: Gazprom will pay less taxes, and the Chinese will be subsidized by our taxpayers.

– But is there at least some benefit for the economy from this construction? Well, at least it keeps pipe-rolling and metallurgical plants busy, thousands of jobs are created...

- Well, then let's lay a pipe to India or somewhere else where absolutely no one needs it! What's the point of this? What, are we going to work in such a way that there is no meaning, no material result? If such work is encouraged, I don’t know what we can achieve.

At one time, Gazprom resisted making an investment decision on the “Power of Siberia,” but in October 2012, after a meeting of the presidential commission on the fuel and energy complex, Vladimir Vladimirovich Putin called Gazprom members to his place and ordered to “accelerate the adoption of investment decisions on your eastern projects.” The investment decision, despite all the resistance of economists even within Gazprom, was made for a obviously unprofitable project.

– Nevertheless, all Gazprom press releases about the “Power of Siberia” are kept in a victorious tone.

– Read the Gazprom magazine, it’s even more fun! When some, excuse me, the head of the company Alexey Miller or his deputy Alexander Medvedev opens his mouth, it’s usually a lie, let’s be honest.

– Tell me, please, will the Power of Siberia affect the gasification of Russia’s interior regions in any way?

– In the same justification for investment that we talked about, calculations were made on how much gas through this pipe it will be possible to consume within the country: no more than 4.5 billion cubic meters per year. This is a microscopic value for Gazprom and for Russia. There is simply not enough consumption in this region.

And second: gasification of Russia is generally quite an expensive proposition. Our regional settlements are scattered very far from each other, and building a network of gas pipelines is completely unprofitable. Of course, there is a solution for this. This is the so-called distributed energy using local energy sources. This includes liquefied natural gas: you can set up a plant near a large pipe, make liquefied natural gas, and then deliver it by tanker trucks to villages and small towns - to gasify these places.

Gazprom is practically not involved in this, although they once adopted such a program. But this is considered unprofitable for the company. It is much easier to pour money into gas pipelines that no one needs and into gas development. So many gas fields have already been developed that one more Europe could be added to Gazprom’s consumers even tomorrow. According to our data, the capacity of Gazprom’s unused fields that can be used is more than 200 billion cubic meters per year. There is simply nowhere to supply this gas.

– It’s a shame: they are building the “Power of Siberia”, regardless of any costs, and when it comes to gasification of Russian regions, they begin to count costs and talk about profitability. Although here the costs would be justified at least by improving the quality of life of people. Is not it?

– I don’t have an answer to this question. I just see that the annual salary of the head of Gazprom is approximately the cost of gasification of the Kursk region. What should I do…

– Do I understand correctly that these 800 billion rubles that Gazprom is investing in the Power of Siberia could have been invested in the development of Russian infrastructure?

- Yes, probably. Or, on the contrary, they could use these funds to increase the salaries of senior executives and Gazprom managers. There are different options here.

– Let’s look at the optimistic option: how many regions would this money be enough for?

– It’s hard for me to say how many regions. Gazprom according to securities allocates about one billion dollars a year for gasification of Russian regions. But if you look at the end of each financial year to see how much money they actually spent, then the cat cried. And when we see how many villages have been gasified, it doesn’t turn out that this money was used for its intended purpose.

– In your opinion, what would be better for Russia: to stop this construction now or to bring the project to completion?

– A lot has already been done there... I think that it would be possible to complete the minimum version - to bring the pipe to Blagoveshchensk, then stop all this and start developing the oil deposits of the Chayandinskoye field so that they do not disappear. It’s nice to press the button when gas flows through the Power of Siberia, report a grandiose geopolitical victory and quietly forget about this undertaking so as not to spend more money.

– ​Don’t spend more money on what exactly?

– To expand construction, to bring it to planned capacity in 10 years. Huge amounts of money will be needed to develop the second field, Kovyktinskoye, for a new 800 km section of the gas pipeline, to prepare gas at a gas processing plant - a lot of things will be required.

They are also planning to add a gas chemical plant to the gas processing plant. And when we look at the list of products that it should produce, we see that, in general, there is no normal market in that region for these products. All this gas chemicals, all these polyethylenes, polypropylenes, styrene and artificial rubbers will have to be exported by rail to the Pacific Ocean and transported by sea. And there the market is captured by competitors - they will have to dump, that is, work again at a loss. The game is not worth the candle, this is again another puffing up of cheeks.

– So what – “Power of Siberia” will never be profitable, under any circumstances? What if oil prices rise again?

– All this will not be profitable. Because the Chinese won't pay. They had already concluded agreements with Gazprom on the price formula even before signing this contract, and everything is tied to the cost of oil. Oil will not rise in price now, but will only become cheaper. As I already said, according to Gazprom’s own calculations, there will be no profitability until 2048 (and if we take into account that construction began two years later, then until 2050). This project does not pay off.

- It's clear. This is all very frustrating, to be honest.

- Well, what to do! When we talk about Gazprom, it is either a lie with fanfare, or a complete disorder.

 

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