But when Power of Siberia pipeline begins, LNG imports may take a back seat to Russian pipeline gas 

From Maritime Executive

China has outpaced Japan to become the world’s largest importer of natural gas, a welcome sign for the developers of liquefaction plants in the Pacific Basin and beyond. Chinese buyers purchased 34.9 million tons of imported gas for the year through May, edging past the 34.5 million tons purchased by Japan.

For now, China gets just over half of its gas import volume from LNG shipments, and its demand for liquefied gas has been accelerating rapidly. It imported about 38 mtpa in LNG last year, up from about 10 mtpa in 2010. Half of that increase came in the last two years alone, and China achieved second-largest-importer status just last year.

A portion of the new volume is shipped from recently-built liquefaction plants in the United States. The U.S. supplied four percent of China’s LNG demand last year, making it the nation’s fifth-largest supplier. Despite growing signs of a potential trade war with the U.S., China has excluded LNG from a list of proposed retaliatory tariffs that it seeks to impose on American goods – a reflection of the priority that Beijing places on maintaining acccess to LNG.

Under Chinese President Xi Jinping, China has begun a large-scale push to shift from coal-fired power to gas, a measure that will significantly reduce smog-creating emissions of particulate matter and SOx. Beijing hopes to power 15 percent of the Chinese economy by 2030, according to its National Development and Reform Commission, an amount that outstrips the domestic supply.

The changeover policy led to widespread gas shortages last December as temperatures dropped and heating demand outpaced the supply, and China is eager to avoid a recurrence next winter.

Hebei, the province surrounding Beijing, has decided to forego further work on its coal-to-gas conversion projects until Gazprom’s massive “Power of Siberia” pipeline is completed. Once operational, the line will deliver up to 60 billion cubic meters per year from Russia to China, an amount equal to about 45 mtpa of LNG – more than the total that China imported in 2017 – and the parties are already in negotiations over a second, parallel pipeline with equivalent capacity.

From Gazprom

China Becomes World's Biggest Natural Gas Importer

Source: Gazprom

The Power of Siberia gas trunkline will transport gas from the Irkutsk and Yakutia gas production centers to consumers in Russia’s Far East and China (eastern route).

In May 2014, Gazprom and China National Petroleum Corporation (CNPC) signed the Sales and Purchase Agreement for gas to be supplied via the eastern route (Power of Siberia gas pipeline). In September 2014, Gazprom commenced the construction of Power of Siberia’s first section running some 2,200 kilometers from the Chayandinskoye field (Yakutia) to Blagoveshchensk (Chinese border).

The second phase of the project will include the construction of a section stretching for about 800 kilometers from the Kovyktinskoye field (Irkutsk Region) to the Chayandinskoye field. The third stage provides for expanding gas transmission capacities between the Chayandinskoye field and Blagoveshchensk.

In September 2016, Gazprom and CNPC signed the EPC contract to construct a crossing under the Amur River within the trans-border section of the Power of Siberia pipeline. Construction in the Chinese territory started in April 2017. In May 2017, a temporary two-way checkpoint was opened on the Russian-Chinese border to provide unfettered access to the border area for construction equipment and personnel.

The 30-year Agreement provides for Russian gas deliveries to China in the amount of 38 billion cubic meters per year. Gas supplies will start in December 2019.

China Becomes World's Biggest Natural Gas Importer

Source: Gazprom

Figures and Facts: Power of Siberia Gas Pipeline

  • Length: around 3,000 kilometers.
  • Diameter: 1,420 millimeters.
  • Working pressure: 9.8 MPa.
  • Export capacity: 38 billion cubic meters per year.

The gas pipeline will traverse three Russian constituent entities, namely the Irkutsk and Amur Regions and the Republic of Sakha (Yakutia).

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