Ruminations on Russia

Or for Russia but whisper that quietly....

My return to the office, leaving SWMBO and the increasingly cute cost centre #1 ("CC#1") in London has allowed me to review the thousands of rss feeds that have piled up in my feed reader.  (Actually this is a fallacy SWMBO is CC#1 and CC#1 is therefore CC#2 but you can't write about your wife that way.)

Which is why I am now posting (again) on GAZP-China relations.  A year ago the press was full of doom and gloom stories of Russian gas going east to China.  Today the story below is that Russia would rather have the gas for its own regions - albeit that this is as much a story about squeezing Exxon to give up on Sakhalin 1 as it is about domestic gas shortages.

At the same time as GAZP is a. trying to reduce gas supplies to China, and China is trying to keep the gas price down, Eni and GAZP are signing a MOU to study a southern gas pipeline in to Europe - again bypassing New Europe.

All of which goes substantially unreported by the mainstream press.

20th June 2007
By Clare Watson
Russia's state-owned gas monopoly Gazprom has told the Kremlin to cancel a contract to supply China with 80 billion cubic meters of gas a year, as it would leave Russia without sufficient gas for its own needs, the BBC has reported.

The gas would have been sourced from fields in Siberia and would have been exported from US company ExxonMobil's Sakahlin-1 development on Russia's Pacific coast, the BBC revealed.

The publication cited Alexander Ananenkov, Gazprom's deputy chief executive, as saying: "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 ExxonMobil."

Gazprom's demands have renewed fears that the country is wielding its rich oil and gas reserves as a political tool, while monopolizing the exploration and production projects being carried out on its territory. If the Kremlin agrees to cancel the agreement with China, the country would be denied access to Russian energy resources, the BBC said.

Although Mr Ananenkov is reported to have said that the state's four far eastern regions alone require more than 15 billion cubic meters of gas a year, China is also in desperate need of energy supplies because of its rapidly expanding economy.

According to Reuters, Gazprom said in June 2007 that the company has been in talks with ExxonMobil in the hope of acquiring all of the gas from its Sakahlin-1 project.

Technorati Tags: Gas, GAZP, China, Russia