Russian state controlled gas giant Gazprom has resumed flows of natural gas to China via its Sila Sibiri (Power of Siberia) pipeline that were interrupted last week, easing concerns that a significant proportion of Russian production might be shut in amid wide ranging international sanctions against the country, and Moscow's threats of retaliation.
Gazprom said a planned maintenance programme had been completed on schedule, with the gas network resuming operations early on Tuesday.
It is expected that, following the maintenance halt, it will take several days before deliveries via Sila Sibiri reach their contracted daily level.
The line was carrying about 40 million cubic metres per day of gas to Chinese customers in March, according to Chinese gas consultancy GasTank, though Gazprom has been withholding export statistics.
Sila Sibiri is currently delivering gas from the Chayanda field in East Siberia, where development drilling continues to drive an increase in production.
However, there are no immediate options available for Gazprom to boost gas flows along this route because there is no direct connection between Chayanda and West Siberia’s largest gas fields.
Focus on China
Deliveries via Sila Sibiri have been scheduled to increase to the contracted level of 38 billion cubic metres per year after 2025 following the full commissioning of a gas processing plant in Russia’s Amur region, close to border with China.
Gazprom also has to bring online a pipeline link between Chayanda and the Kovykta gas field, which is its next development target.
There have been some concerns that the construction and commissioning of the Amur facility's remaining uncompleted trains could be jeopardised if sanctions could halt supplies of hi-tech processing equipment and technology to Russia.
The Amur processing facility aims to remove helium and other off-spec hydrocarbons from the mixture of gas that will arrive from both fields before being sent onwards to China.
According to localreports, Amur regional authorities have acknowledged the possibility of “temporary difficulties” at the plant and other related infrastructure projects due to sanctions, and said they will not insist on agreed commissioning deadlines.
Gazprom and the Russian government have said they consider China a priority market for Russian gas after European authorities resisted efforts to increase Gazprom’s control over gas distribution networks and storage facilities on the continent.
Troubles in Europe
Relations between Gazprom and European nations deteriorated last year when the Russian giant was criticised for refusing to increase gas deliveries above minimum contracted levels, thus contributing to the shortage of gas and unprecedented jump in energy prices that followed.
Although Gazprom and the Russian government denied the accusations, European Commission antitrust officials raided the offices of two of the company’s subsidiaries in Germany, Gazprom Germania and Wingas.
The raid was reportedly linked to an EC investigation into Gazprom’s alleged market manipulation of the European gas market in 2021, according to Reuters.
Previous reports said Gazprom had not replenished gas storage facilities under its control in Germany and Austria last year.
After the raids, Gazprom announced it had ceded full control of Gazprom Germania and its related affiliates in Europe to an unknown Russian limited liability company, Palmary.
German authorities have hit back, claiming they had not agreed to Gazprom’s decision.
This week, Germany subjected Gazprom Germania to administration by a special trust and ruled that all voting rights in the company will be in hands of country’s regulator, Bundesnetzagentur, until 30 September 2022.
According to Mikhail Krutikhin, a partner at Moscow-based energy consultancy RusEnergy, Gazprom’s move to distance itself from Gazprom Germania was a “last ditch attempt to save a key subsidiary” from being thoroughly investigated.
Gazprom Export has not responded to requests for comment at the time of publication.
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