Handelsblatt (Germany): the Russian-Chinese gas project in Siberia has stalled

In the Siberian Yakutia — where in Oymyakon is a cold pole of the Earth, — back spring. The temperature at the Chayandinskoye oil and gas field the day reaches 20 degrees. But positive mood was not observed.

Here should be actively to produce gas for running to China pipeline “Power of Siberia”. The head of the Kremlin Vladimir Putin and Chinese President XI Jinping in early December, opened a gas pipeline stretching over 2,000 kilometers as a symbol of the new Union of the dragon and the bear. Russian turn to the East, seem to have succeeded. And China found overflowing source to quench its energy thirst. But now everything came to a halt.

This year Gazprom is to supply 5 billion cubic meters of gas by pipeline “Power of Siberia”. Chinese customs authorities announced that since the launch of the pipeline in December, it delivered only one billion cubic meters, and it’s been almost six months. It is not surprising: in March, the new pipeline was closed for several weeks, the official reason — maintenance.

The unofficial cause — a coronavirus. From-for quarantine in the Chinese economy has sharply reduced demand for gas. No sooner had the Chinese more or less to bring the situation under control, as the crisis erupted on the other side of the pipeline.

Gazprom recently had to build a mobile hospital in the mountain village of Chayanda field. Among the workers, an outbreak of coronavirus. 3.5 / 10 thousand employees at the end of April contracted covid-19. More than 7 thousand people were evacuated from camps and settlements. The quarantine is lifted only on Monday.

The situation is under control, said the Deputy head of the press service of Gazprom Andrei Chernykh. Gas production and conditioning at the Chayandinskoye field are held in normal mode, he said. Gas supplies to China are carried out in accordance with the contract.

Dozens of wells are depleted

The coronavirus is not the only problem in the Chayandinskoye field. According to media reports, there are major difficulties with the development of the field. The Internet portal “Tape” reported that if exploration and drilling were committed serious mistakes.

“The main problem Chayanda that the field was not ready for development. It was in the exploration stage. The exploration is almost never started, not completed”, — quotes the portal of the head of the Gazprom Department for the production of Andrei Filippov, who confessed to the engineers of Gazprom in October 2019. They found significant shortcomings.

In the result of wrong decisions on drilling in 41 out of a total of 148 wells production fell sharply, and 20 wells were completely dry, writes Lenta referring to the internal report of Gazprom. Losses from these wells amount to 334 billion rubles.

“The fact that Gazprom there are internal reports which show the unvarnished reality, well known to me since my work in the Ministry of energy 20 years ago,” said the industry expert Alexei Turbin publication Handelsblatt. Concerns are that due to errors during development significantly reduced the profitability and yield of the field.

The tender for drilling was won by the company “Gazprom drilling”. The firm, whose title sounds like this “daughter” of Gazprom (previously it was), nine years belongs to the Empire of a billionaire and a sparring partner Vladimir Putin judo Arkady Rotenberg. He, in turn, rewrote the company of his son Igor.

Gazprom refused to comment on the number of “dry” boreholes on request Handelsblatt. Instead, the company noted that the yield of wells — “higher than anticipated”. And the total production volume of 25 billion cubic meters of gas a year in the planning was not adjusted downward. But while the company is still far from these targets.

Possible participation of other mining companies

In addition, the “Tape” is not the only media that writes about the difficulties in drilling. Industry portal neftegaz.ru confirmed that information about the problems appeared few months ago, noting that the purpose of this message is to explain the outflow of reserves in Western Siberia, which are planned to be spent on other projects such as “Nord stream — 2”, which is still stalled due to sanctions.

In any case, the plans for completing the Chinese pipeline in question. The Chayandinskoye field is estimated at 1.2 trillion cubic meters, although previously heard of evaluation in 2 or 1.4 trillion. A supply agreement with China was signed for 30 years, the annual delivery volume is 38 billion cubic meters of gas.

In addition, Putin has recently approved to increase capacity of the pipeline is 6 billion cubic meters. This agreement is not signed yet but already announced. Along with the Kovyktinskoye field to fill the “Power of Siberia” will be used another large gas field. Kovykta, but has not yet been developed — and there also could be a problem.

“If Change do have difficulty, then Gazprom due to geographic location will be relatively hard to fill in this gap,” says Turbin. But associate Professor Gubkin Russian state University of oil and gas. I. M. Gubkin Vladislav Karasevich sees geopolitical issues: gas reserves in Siberia, enough to fill the pipeline.

If necessary, Gazprom will have to attract to fill the export gas pipeline Rosneft and independent companies in the region, he said. Gazprom clearly wants to avoid — otherwise, the losses can grow exponentially.