Russian state-controlled gas monopoly Gazprom has taken a major step towards laying a new gas export pipeline to China by determining the parametres of its transit segment in Mongolia.
Gazprom said that, following completion of a technical feasibility study, it has fixed the general parametres such as the diametre and length of the Mongolia’s transit segment, the number of compressor stations to be built and operating pressures.
Also, the proposed route from the Russian border across Mongolia to the Chinese border has been determined, the company added.
The Mongolia’s segment — codenamed Soyuz-Vostok — is due to run for about 1000 kilometres in the eastern part of the country, passing the capital Ulaanbaatar.
It will be part of Sila Sibiri 2 pipeline — due to extend for 6700 kilometres — that Gazprom intends to build from its prolific gas fields in the Yamal-Nenets region to deliver up to 50 billion cubic metres per annum of gas to China and its capital, Beijing.
The pipeline project is important for Gazprom because the monopoly already announced long-term plans to significantly grow its gas exports to China to compete with deliveries from Turkmenistan, Kazakhstan and Uzbekistan.
Additionally, the monopoly hopes that it will increase its flexibility in managing the flow of gas between its core export markets of Europe and China.
Also potentially on the cards is a link is also between Sila Sibiri 2 and the Kovykta gas field in East Siberia that Gazprom will also use as a source of gas for its first gas export pipeline to China, Sila Sibiri, which started operations at the end of 2019.
Annual deliveries of gas via Sila Sibiri have been contracted at a maximum capacity of 38 Bcm, however, Gazprom said that it may eventually increase them to 44 Bcm after upgrades to the pipeline.
Gazprom said that it expects another study to be finished before the end of this year, to provide an estimate for required capital investments into Soyuz-Vostok and its operating costs after it is commissioned.
Industry reports in Moscow have already suggested higher than usual construction costs, as the future gas pipeline will require additional protection from earthquakes as it passes an area with high seismic activity in Mongolia.
Analysts in Moscow expect construction work in Mongolia to be contracted to a few Russian pipeline builders that have been traditionally working for the gas giant.
