Gazprom, the largest Russian company and the biggest extractor of natural gas in the world that accounts for about 93% of Russian natural gas production and Russian energy has asked the government to cancel an agreement to pipe large quantities of gas to China from Siberian fields.
The gas was to be exported from Exxon Mobil’s Sakhalin-1 project on Russia’s Pacific coast. According to the plan Russia would have delivered 80bn cubic metres of gas a year to China.
Alexander Ananenkov, Gazprom’s deputy chief executive said:
We consider it necessary for a directive to be issued and Sakhalin-1 gas to be sold to Gazprom so we could supply gas to Russia’s regions, and for the gas not to be exported as proposed by Exxon Mobile.
The delivery of the gas would have left Russia’s four far eastern regions deprived of more than 15bn cubic metres of gas a year and would have left Russia short with the gas.
In case if the Russian government accepts Gazprom’s proposal of canceling Sakhalin-1 then China will have no gas supplies from Russia and its economy will suffer a lot due to growing need for energy supplies and power. This will also increase concerns over the growing influence of state-run Gazprom and the Kremlin’s grip on its domestic gas industry.
Shell, Canada’s major producer of natural gas was forced to sell its stake in the Sakhalin-2 project to Gazprom after pressure from Russian regulators whereas BP is currently waiting to hear if its license for the Kovytka gas field in East Siberia is withdrawn.
It is also expected that Gazprom may face a fight in wresting control of Sakhalin-1 from rival Rosneft, which is a shareholder in the project with Japan’s Sadeco and India’s Videsh.
Source: BBC
