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Russia gas to Asia may reach 50 bcm by 2020

SAKHALIN-2 LNG tanks.jpg

Russia's natural gas exports to China and South Korea will reach 25-50 billion cubic metres (bcm) a year from 2020, the Russian Energy Ministry said on Friday.

The ministry said it has confirmed a long discussed programme of gas production development in East Siberia and Far East with the potential to export the fuel to the Asia-Pacific region.

The programme also says Russia's exports of liquefied natural gas (LNG) to the region are expected to reach 21 bcm a year from 2020 and further grow to 28 bcm by 2030.

To reach the goal Russia will double its LNG production capacity in the region from 9.6 million tonnes per year to be produced at the Sakhalin-2 LNG plant, which the project's operator Gazprom plans to launch in the end of 2008.

Russia relies on the resource rich but still underdeveloped East Siberia and Far East to replace West Siberia as the main source of energy exports and wants to increase significantly the supplies to the fast growing Asian-Pacific markets.

The ministry said it expected natural gas production in the region to grow over 18-fold to 2020 and 20-fold by 2030 compared with last year's output to 150 and 162 bcm, respectively.

To fulfil the programme, Russia will invest in the region's gas production over 2.4 trillion roubles through 2030, the ministry said.

Russian gas monopoly Gazprom, which supplies Europe with a quarter of its gas, promised last year to build two pipelines to China, from West and East Siberia, to begin pumping gas through the west link in 2011 and by the east link in 2016.

But the plan has been on hold as the parties can not agree on the price which Gazprom insists should give comparable netbacks with its sales to Europe.

The ministry also said it did not expect the development of the Kovykta gas field in East Siberia to start until 2017 while the Chayanda deposit in Yakutia in the country's Far East was not to be launched earlier than 2016.

Gazprom operates both, Sakhalin-2 and Kovykta, after it bought control over the first project from Royal Dutch Shell last year and took over the second project from BP's Russian venture TNK-BP earlier this year.

The gas firm earlier this year asked the government to grant it the licence for Chayanda, which has yet to be awarded, without a competition. The energy ministry official said the ministry did not discuss the issue while working out the programme.

© Reuters

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