MOSCOW, June 2 (RIA Novosti) – Russian energy giant Gazprom announced its plans to promote underground gas storage facilities development in China, which according to Gazprom’s Head for Underground Gas Storage Sergei Khan’s interview to Gazprom Magazine, will help avoid an increase in investment costs of Gazprom’s gas delivery to China.
“High level of day to day fluctuations of Russian gas delivery to China results from insufficient development of underground gas storage facilities in China. This can lead to increased investment costs for Gazprom in implementation of the export project and later to a non-optimal operation of the future gas pipe. This is why it’s so important to promote development of underground gas storage facilities in China,” said Khan.
The expert also added that there are depleted hydrocarbon deposits in North East China which can facilitate the underground gas storage development.
On May 21 Gazprom and China National Petroleum Corporation (CNPC) signed a 30 year contract to deliver to China 38 billion of cubic meters of gas annually, worth 400 billion USD in total. This is the largest contract for Gazprom to date.
Gas delivery to China is connected with several significant investment projects, including development of Chayandinsky and Kovyktinsky gas fields, construction of a gas pipe “Power of Siberia”, and gas treatment and helium plants in the Amur region. Gazprom’s total investment in this project is assessed at 55 billion USD.
