Does Russia need Power of Siberia-2?

Gazprom is launching another megaproject. According to Alexey Miller, the state corporation will build the Power of Siberia-2 pipeline, through which it intends to supply China with up to 50 billion cubic meters of gas per year. Considering the existing problems with deliveries via Power of Siberia-1 and the fact that there is no contract with Beijing for the second gas pipeline and is not expected in the near future, the optimism of the top manager raises questions.

Power of Siberia-2 is to connect the fields of Western Siberia with the western regions of China with a pipe 6700 kilometers long. Mongolia will act as a transit country. The estimated capacity of the gas pipeline is estimated at 50 billion cubic meters per year, and the cost of construction is up to $ 13,6 billion. Since supplies to Europe come from the same resource base, in some domestic media this statement is presented as a threat to leave the EU without gas. The reality looks a little different.

The fact is that this measure on the part of the monopolist looks forced. The share of Gazprom in the German and Turkish markets, which are the largest for it, is constantly decreasing, and Ankara may even become a competitor after discovering large gas reserves on its offshore shelf. Due to the unique macroeconomic situation, LNG has fallen sharply in price and is cheaper for buyers than the Russian pipeline. Many new LNG terminals have been built in Europe. Brussels is preparing the so-called "carbon tax", after the introduction of which the products of "Gazprom" will become even less competitive. At the same time, the EU leadership explicitly warns that in thirty years it intends to completely abandon the use of fossil fuels.

In general, the trends are, to put it mildly, unfavorable. In the medium term, the monopolist will simply have nowhere to put its gas from the depths of Western Siberia, and foreign exchange earnings will not come out of thin air. In 2014, the notorious "pivot to the East" was announced. It was assumed that the growing Chinese market could, if not replace the European, then significantly diversify risks. But it turned out differently. With fanfare, the Power of Siberia gas pipeline, which has been launched, is unable to reach full capacity. In May, information leaked to the Russian press that the real reserves of its resource deposits turned out to be highly overestimated, and during development they were allowed technological error.

At the moment, the most popular version of the activation of Power of Siberia-2 is the need to plug this hole at the expense of well-researched West Siberian fields. It is assumed that a bridge will be built between the two gas pipelines. There is no special need in this project, except for the urgent need for the top management of the state corporation to cover one place for itself at the expense of the budget. China is happy to buy cheaper LNG, pump pipeline gas from Turkmenistan, and is actively developing its own fields. By the way, Beijing is the owner of the world's largest shale gas reserves. Yes, they are hard-to-recover, but work on the development of appropriate technologies is ongoing, and the result will be obtained sooner or later. In addition, the Celestial Empire is diversifying its sources of energy through renewable ones. Taken together, this means that Gazprom's management intends to build a second reserve gas pipeline for the Chinese at the expense of budget funds, the commercial return of which remains a big question, since the PRC has a very strong negotiating position and knows how to bargain.

However, there is a silver lining. There is an opinion that the state corporation has decided to start real gasification of its country. Losing foreign markets, Gazprom switches to domestic. Finally, the Russians themselves will be able to use the Russian "blue fuel". But let's be objective, in the future, such investments mean an inevitable increase in tariffs.
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  1. Jarilo Offline Jarilo
    Jarilo (Sergei) 4 September 2020 11: 29
    Gazprom is already in debt, which the forces of Siberia are 2. For the first one has not yet been paid off. Gazprom will soon go under the hammer.
  2. 123 Offline 123
    123 (123) 4 September 2020 11: 58
    And they do not need to build anything, because there are already a lot of problems, and nothing will pay off forever and ever. Diversification of markets is forced, they did not come up with it, it was their life that made them, and the Turks threw it. Yes, and the Chinese will soon learn to extract gas from everywhere and practically for nothing, and they will not need our gas, and if they do, then not ours, but free overseas gas. Yes, they build everything on people's hard-earned money for the cunning Chinese, there would be no way to distribute everything to pensioners and journalists. And if they also gasify their territory, they want to raise the tariffs and tear off the last skin from the people.
    It is generally belay what happened?
    I suspect that a cleaning lady from Gazprom offended the author as a child with a mop. winked
    There is simply no other explanation for the foaming fanatical "Carthage must be destroyed". request
  3. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 4 September 2020 14: 01
    The author is partially right.
    We need to think strategically, like Gazprom, not the local government.

    What does the state-owned company Gazprom get: projects, money, bonuses, stock returns, jobs for government officials, and for gas workers.
    China: Gas and reserve pipelines.
    Russia (population): rising prices for gas and goods. Russia (elite) - the ability to steal gas, build dachas, palaces, attach children over the hill (like Arshukov, for example).
  4. 123 Offline 123
    123 (123) 4 September 2020 15: 16
    I understood why so much screeching came from. laughing They are too shy to blow the trumpet about another peremog over the sworn Horde after the Saudis. winked

  5. King3214 Offline King3214
    King3214 (Sergius) 4 September 2020 15: 47
    With the Power of Siberia, Russia expands its sales markets and reduces dependence on a large, but very dastardly and hypocritical buyer - the EU.
  6. Oyo Sarkazmi Offline Oyo Sarkazmi
    Oyo Sarkazmi (Oyo Sarkazmi) 4 September 2020 15: 54
    The author, well, you are so unencyclopedic. Gas is supplied to Turkey from Iran, Azerbaijan and Russia. The share of Russia - 29 billion cubic meters per year - 50% of Turkish consumption. In addition, Gazprom promptly compensates for the irregularity of supplies from Iran.

    In some periods, daily volumes supplied through the Blue Stream gas pipeline correspond to the level of its design capacity. This is due to the fact that Turkey is facing non-fulfillment of obligations on supplies from Iran, and Gazprom, meeting its Turkish colleagues halfway, compensates for these shortfalls. [14]

    And Germany is 40% dependent on Gazprom, and Europe as a whole - 33-36%. When an explosion occurred at the Vienna hub, both Italy and southern France were left without Russian gas. As the Italian prime minister said -

    it's bad without Russian gas
    1. Natan bruk Offline Natan bruk
      Natan bruk (Nathan Brook) 5 September 2020 06: 20
      It was once, today everything is much sadder. What 50%, what 40%, ask what is happening today.
      1. Oyo Sarkazmi Offline Oyo Sarkazmi
        Oyo Sarkazmi (Oyo Sarkazmi) 5 September 2020 08: 27
        Quote: Natan Bruk
        ask what is happening today.

        And you ask what has been happening with gas and oil since, well, at least since 2000. Gas consumption is growing all over the world, with the exception of Ukraine.
        The current situation is the result of the addition of two factors - the possibility of stopping transit through Ukraine in 2020, and the warm winter of 2019-2020.
        The possibility of interrupting transit forced Europe, even in winter, to stock up on gas at 95 percent. As a result, in the summer of 2020, there was simply nowhere to import gas. And, if the mountain ash does not lie (the rowan harvest is due to a harsh winter), then the problem will resolve over the winter.
        1. Natan bruk Offline Natan bruk
          Natan bruk (Nathan Brook) 5 September 2020 09: 50
          Today gas consumption is falling sharply. All that remains is to look at the mountain ash and hope for a harsh winter. Well, how will it not be justified and again there won't be really winter?
  7. kriten Offline kriten
    kriten (Vladimir) 4 September 2020 17: 56
    The most profitable for the Gazprom management is the construction of pipelines. You can steal from 50 to 70%. And what will happen next is the state's problems. These will get theirs.
  8. gorenina91 Offline gorenina91
    gorenina91 (Irina) 5 September 2020 17: 12
    - I personally have been writing about Gazprom for 1,5-2 years already ... - What else to write about it ... this Gazprom fell into those "traps" about which I have been talking about a long time ago ... - said, spoke, uttered ...
    - And today it is hardly worth relying on the fact that

    There is an opinion that the state corporation has decided to start real gasification of its country. Losing foreign markets, Gazprom switches to domestic. Finally, the Russians themselves will be able to use the Russian "blue fuel".

    - For this, only one single "trifle" is needed ... - This is for the Bolsheviks to come to power in Russia again and proclaim ... - "Soviet power plus gasification of the whole country" ... - But nothing else ... - Why would Gazprom suddenly start switching to ... to ... to the "domestic market" ??? - Also, the price of gas for the population can be reduced ??? - All this ... - "das ist fantastish" ... - On the contrary ... - if Gazprom begins to create an appearance ... - to stir up something with the domestic market, then only in order to increase the price of gas for internal consumption ... - There is simply no other ...
    - Yes, figs with him ... - with Gazprom ... - with him everything is already clear ...
    - But personally, I am very surprised ... - Why is it all suddenly so led to the obstruction of Gazprom ... - even the "overshoes" and then ... began to express dissatisfaction with Gazprom ...
    - Gazprom today is not such a major problem (or rather, everything is clear with it) ... - And today there is a much more weighty problem ... - this is NOVATEK ... - Today NOVATEK, using such a "distraction" ... how Gazprom started (and already started long ago) its "activity" ...
    - And who is driving this NOVATEK there today; and which Russian enterprises and deposits and which "co-founders" are assigned; and who has a real controlling stake in their hands ... - which "import accomplices" ??? - This is the upcoming new bondage for Russia ... - Something needs to be done and corrected here ...
    - A Gazprom, Turkish Stream; SP-2; The power of Siberia and so on ... - this is already yesterday ... - Here Russia flew in full and irrevocably ... - With this you just have to put up with it ... - nothing can be done about it ... - "What about the cart fell "...
    - Today we have to live with today's problems ... - and solve them ...
  9. kriten Offline kriten
    kriten (Vladimir) 11 September 2020 14: 53
    The Kremlin, with its trumpet mania, was noted on all fronts: in all seas, and with China as well. The wise strategists of Gazprom became billionaires and presented the country with huge losses.