Sedigas - Annual Report 2.009

Gas in the world > Improvements in infrastructure > Russia and the Caspian Sea countries

Russia and the Caspian Sea countries

One of the milestones in 2009 was the official opening of the Sakhalin liquefaction plant in February, with its first shipment being delivered to the Japanese market in April. The plant (part of the Sakhalin II project) has two liquefaction lines, with capacity for 9.6 million Tm per year. Although it did not achieve a regular rate of production in 2009, it does turn Russia into a producer of LNG.

One month after it was opened, Gazprom and Gas Natural-Unión Fenosa signed an agreement including the supply of LNG for those markets where the Spanish group operates, with the strategic aim of increasing the competitiveness and flexibility of joint operations in the global LNG market.

The weak evolution in demand did not encourage decision-making on a number of projects for which specific plans were to be drawn up in 2009. One such is the Shtokman Project, on which the investment decision has been put back until 2010. Located in the Barents Sea, this is to be one of the cornerstones of Russian production from 2013 onwards, with output by 2020 of 620 bcm per year. The general connection network would be put in place close to St Petersburg. Another project affected is exploitation of the Bovanenkovo field, is essential for future supplies to Europe, where operational start-up could be delayed by a year (until 2012). Its initial production would be 115 bcm.

The Russian Federation has signed agreements with the countries of the Caspian Sea to guarantee supply of the South Stream project. It has also signed agreements with Turkey, which is attempting to exploit to the maximum its territorial position on the route of the South Stream project and the Nabucco gas pipeline.

The South Stream gas pipeline would run along the bed of the Black Sea, and is planned to start operations in 2015, pumping 63 bcm/year. Nabucco is scheduled to enter operation in 2015, with a provisional capacity for 31 bcm. Both projects are designed to bring gas to Central Europe. The first would end in Bulgaria, and the second in Austria. The final investment decision has not been taken on either.

A number of European countries, including Hungary, have signed agreements for involvement in the South Stream gas pipeline, without giving up the alternative Nabucco project.

Russia has for several years been attempting to diversify its markets. Alongside the Sakhalin plant, it intends in the medium term to construct an LNG export plant on the Yamal Peninsula and is finalising plans to supply the Chinese market by gas pipeline.

In October a high-level agreement was signed by the Russian and Chinese authorities in Beijing. A senior Russian government official defined this as a route map which, if it comes to fruition, would carry some 70 bcm of Russian gas to China each year. Gazprom sources indicated that the gas would be delivered by means of two gas pipelines, one from Siberia and another from the Eastern reserves, including Sakhalin.

In September work began to construct the Sakhalin-Khabarovsk-Vladivostok gas pipeline, measuring 1800 km in length and capable of carrying 30 bcm per year. It is intended to serve the domestic market, although could potentially be used to export gas to countries of East Asia, including Japan. The gas pipeline will be operational by 2011.

In the initial months of 2010, the countries of the Caspian zone will begin operations on a gas pipeline to carry gas from Turkmenistan to China.

Annual Report 2.009: Sedigas - The Spanish Gas Association