The main gas pipeline "Power of Siberia": scheme

Russia and China are becoming close partners in the economic sphere and in the foreign policy arena. Between the states there are large-scale agreements on cooperation in the business sphere. These include the gas contract for the supply of blue fuel to China by means of the "Siberia Power" highway.

What are the most noteworthy facts about this project? What is the scheme for the planned delivery of gas from Russia to China?

Basic information about the project

The pipeline "Power of Siberia" is supposed to be conducted in the People's Republic of China from Yakutia. The largest cities through which it will pass - Blagoveshchensk, Khabarovsk, and also Vladivostok. The project "Strength of Siberia" is among the most high-priority for Gazprom. The corresponding work will be carried out both from the Russian and from the Chinese side. The gas pipeline will unite fuel distribution systems in Irkutsk and Yakutia gas production centers . It is noteworthy that the name of the project - "The Power of Siberia" - defined by the results of the contest.

It is assumed that the first section of the gas pipeline - from Yakutia to Khabarovsk, and then to Vladivostok - will be put into operation by the end of 2017. It can be noted that the route of the gas main will go along the route of the oil pipeline, which goes from East Siberia to the Pacific coast. This will significantly reduce the cost of building the necessary infrastructure of the project and energy supply.

Gas pipeline characteristics and scheme

The project "Strength of Siberia" assumes the construction of a gas main with a length of about 4 thousand km. It will be used for the withdrawal of natural gas, as we noted above, immediately from two production centers - Irkutsk and Yakutia, towards Khabarovsk. It is expected that the gas pipeline will become a powerful stimulus for economic development not only of the Far East, but also of the Asian part of the Russian Federation as a whole. This will be possible not only due to the growth of direct revenues and the emergence of jobs in gas producing and transport enterprises, but also due to the increased level of gasification of settlements and, as a result, the opening of opportunities for launching new production facilities. These processes will be further stimulated by budgetary support, in particular, provided under the gas supply development program in Primorsky Krai.

The map of the pipeline "Power of Siberia" looks like this.

We see that the project implementation scheme involves the coverage of a huge area. It will also be interesting to study the economic scope of the project.

Economic scales

The "Siberia Power" gas pipeline is among the largest projects in the history of economic development in modern Russia. As you know, a large gas contract was signed between Russia and China, as a result of which Gazprom got the opportunity to enter a new market characterized by enormous potential. According to some information, Russia will have to supply to the PRC about 1 trillion cubic meters of gas for a total of about $ 400 billion. For comparison: Russia's GDP by PPP is about 3500 billion dollars. It is known that Gazprom's counterpart, the Chinese National Oil and Gas Corporation, will pay an advance of $ 25 billion before fuel supplies start. Estimated throughput capacity of the gas pipeline is about 38 billion cubic meters of gas annually. The fuel transportation intensity corresponding to this indicator will be achieved, as expected, within 5 years from the time of the first deliveries.

According to some experts, the "Siberia Power" gas pipeline will be put into production capacity by 2024. Now Russian enterprises are engaged in the preparation of construction sites, as well as the import of necessary materials and equipment. It is expected that during 2015 about 500-600 thousand tons of equipment will be delivered to the sites. Also in 2015, it is expected to start construction of the first stage of the gas main.

Signing the contract

The contract between the Russian Federation and the People's Republic of China for fuel supplies on the so-called eastern route was signed on October 13, 2014 at the level of the governments of both states. In accordance with this agreement, key conditions for the partnership between Russia and China in the part of the project were determined, including in the aspect of design, construction, and operation of the transboundary zones of the pipeline. The construction of the Siberia Power pipeline was transferred to the competence of two companies - Russian Gazprom and CNPC (China National Oil and Gas Corporation).

The signing of the contract between the Russian Federation and the People's Republic of China in the construction of the highway under consideration allowed our country to rely on diversification of supplies of blue fuel. Now, according to analysts, too much dependence of Russia's gas exports on sales to Europe is traced. In addition, due to political differences between the Russian Federation and the West, difficulties may arise with the further development of partnership in the corresponding direction. Thus, the reorientation of gas exports to China is a step towards much-needed diversification of supplies. China is a growing market with a developed industry, which always needs large volumes of blue fuel. Russia is one of the few suppliers ready to sell gas to China in a stable and affordable manner.

Gas production resources

So, the "Siberia Power" gas pipeline will supply fuel to the People's Republic of China in the Irkutsk and Yakutia centers. As for the first resource, gas production is expected at the Kovykta field. The fuel reserves in it are estimated at about 1.5 trillion cubic meters. As for the Yakutia Center, the extraction will go on the Chayandinskoye field. Its reserves are about 1.2 trillion cubic meters.

Features of the construction of the gas pipeline

Thus, we see how powerful and large-scale is, including in the part of the title, "The Power of Siberia" is a gas pipeline. Who builds it? Who is the general contractor for the implementation of this international project?

It is interesting that the general contractors for the "Siberia Power" gas pipeline may not be involved. At least in the media this view is widespread. It is assumed that the contractors will be building small-sized organizations in the "Power of Siberia" pipeline. In this sense, Gazprom, as some analysts note, changed its tactics - earlier the Russian gas corporation still chose the leading partner. In the case of such a project as the pipeline "Power of Siberia", contractors will perform local tasks.

The traditional scheme

The traditional scheme, practiced by Gazprom, implied the distribution of contracts within large lots, that is, the leading organization that was involved in the construction of a section of the highway was identified. For example, the infrastructure of "South Stream" before it was reoriented to Turkey, was run by the corporation "Stroygazmontazh". The European section of the South Stream was to be built by Stroytransgaz. In turn, the project "Nord Stream" was implemented with the leading role of the company "Stroygazconsulting".

Sanction factor

The established scheme, according to analysts, is not entirely optimal under current conditions, when sanctions against the Russian Federation have been imposed on the part of the West. The fact is that these Russian companies also fell under them, so they can not import certain types of necessary equipment. In particular, this is the technique of Caterpillar, as well as welding complexes like CRC-Evance, produced in the United States.

Warranty Criteria

Another version explaining the revision of Gazprom's policy towards contractors is that under such large-scale projects, which is the "Siberia Power" gas pipeline, the Russian Federation practices bank guarantee requirements. The difficulties with such can have Gazprom itself. The fact is that the largest Russian gas company in 2015 should transfer to its creditors about 174.3 billion rubles. This debt is not considered by analysts as too big for Gazprom, but now the corporation can not attract long-term loans in case of a deficit in revenue.

There are reports that 15 companies will be involved in the construction of the "Siberia Power" gas pipeline as a whole. Among them there is the company Stroytransgaz. Among other firms with which Gazprom can contract - EVRAKOR, Argus Special Assembly, Irkutskneftegazstroy, SpetsMontazhProekt.

The estimated costs for the construction of the "Force of Siberia" - about 770 billion rubles. Of these, in particular, about 283 billion rubles will be invested in the economy of the Republic of Sakha.

Project Estimates

So, we studied the main economic indicators of the project. We also examined the map of the "Siberia Power" gas pipeline. What are the assessments of the prospects of the project in the context of Russian analysts?

In general, experts agree that the "Power of Siberia" is an example of a successful international partnership. The point is that this gas pipeline is equally necessary for both Russia and the PRC. In the political context, the project, analysts believe, contributed to the further strengthening of the allied relations between the two states.

The economic effect is estimated by experts exclusively positively. Gazprom's revenue for fuel supplies, as we noted above, will be about $ 400 billion. The corresponding regions of the Russian Federation will receive a significant stimulus to economic development, both in terms of inflow of investments and in terms of building a new infrastructure, including industrial ones.

There is a version that the main consumers of gas in the world in the medium term will be India and China. "The Power of Siberia" is a project that in this sense is fully relevant from the point of view of correlation with world economic trends. According to some estimates, in 2020, the dynamics of gas consumption in China will reach about 420 billion cubic meters.

Russia and China, having signed an agreement on the supply of blue fuel, opened up opportunities for expanding partnerships in the border regions. Thanks to the availability of new infrastructure, the Russian Federation will be able to efficiently develop new natural deposits rich in Siberia and the Far East. Opportunities will be opened in the part of import substitution, increasing the volume of industrial production in the region.

The construction of the "Siberia Power" gas pipeline is expected to become a positive factor for the development of the Siberian and Far Eastern regions in general, including the social aspect. Citizens residing in the relevant parts of Russia will receive new opportunities for employment, business, and training.

The incentive to invest

The growth of the economy of Siberia and the Far East will predetermine, as analysts expect, the growing interest of investors in these regions. At the same time, it is calculated that not only businessmen from China, which are very close to, but also from other states - in particular, South Korea, Vietnam, Singapore - will be operating in the respective territories. A significant reorientation of the priorities of domestic investors is expected. Many of them are now invested in foreign projects, and it is quite possible that their capitals will also be directed to the economy of Siberia and the Far East of the Russian Federation. This can also be facilitated by sanctions restrictions that apply to Russian enterprises.