Gazprom wants to drive China’s shift to gas power

Image courtesy of Gazprom

Image courtesy of Gazprom

A roundtable on oil and gas cooperation was held today by China’s CNPC at the Belt and Road International Forum in Beijing. The event was attended by a Gazprom delegation led by Alexey Miller, Chairman of the Gazprom Management Committee.
According to Gazprom, Chinese government is developing a large scale coal-to-gas switching program, in order to pass from the current 6% of gas share in the country energy mix to something between 8.3 and 10% by 2020. Given that China is one of the World’s biggest gas consumers, each percentage point is worth tens of billions of cubic metres in gas imports, because domestic production cannot withstand such a large shift.
Gazprom is currently building the Power of Siberia gas trunkline as part of the project for Russian gas supplies to China via the eastern route. It is the world’s largest investment project in the field of gas transportation. As of May 16, 2017, 745 kilometers of the pipeline were built and 1,009 kilometers were welded in one string. Gazprom is negotiating future gas deliveries from Russia’s Far East. It is planned to reach an agreement on the supply terms by the end of 2017.
Moreover, on May 15, 2017, three contracts were signed at the Belt and Road Forum to conduct pre-development surveys for the purposes of creating underground gas storage facilities in China’s Heilongjiang and Jiangsu provinces. During the same meeting, Gazprom, CNPC, and China Huaneng Group signed a Memorandum of Understanding to pursue joint efforts in the power sector within China.