ALL Is NOT WELL WIth GAZPROM & RF NG PRODUCTION Gazprom gas output in steep decline but China deliveries not affected
Russian state giant might post lowest annual output since its creation in 1989
2 October 2023 15:49 GMT
Updated 2 October 2023
15:49 GMT Gazprom has revealed a strong decline in gas production in the first half of this year, but underlined its slack operating performance will not affect its plans to increase exports to China.
The Russian state-controlled gas giant reported its natural gas output fell by almost 25% to just above 179 billion cubic metres between January and June this year against the same period last year.
Gazprom said the decrease in production is “associated with the adoption in a number of [European] countries of politically motivated decisions aimed at refusing Russian gas imports”.
In its first half-year report published since the beginning of the Ukraine war, Gazprom said 166 Bcm of gas it had produced had been shipped to customers in Russia and outside the country via the Gazprom-controlled transmission network.
It also transported about 121 Bcm of gas from other producers in Russia to customers.
The figures suggest Gazprom’s share on the domestic market is declining further and is being taken up by independent gas producer Novatek and other companies.
Gazprom acknowledged that Russian gas independents are keen to grow their domestic deliveries with 15 producers booking its pipeline capacity in the first half of this year.
According to the Russian law, Gazprom has the monopoly over gas pipeline exports, with other producers having no option but to sell gas domestically.
Gazprom also revealed it has been lagging behind in pumping gas into Russian underground storage, with almost 19 Bcm being sequestered in the first half of this year against almost 24 Bcm of gas last year.
The shortfall comes despite the weather being favourable for gas injection into storage, as temperatures in Russia “were milder” compared with the winter and spring of 2022, according to Gazprom.
Portovaya LNG
Gazprom’s Portovaya LNG terminal near the city of Vyborg on the Baltic Sea is nearing its 1.5 million tonne per annum capacity, producing 661,000 tonnes of LNG in the first half of this year.
The project began operations last year, despite environmentalists fears as gas flared during its long commissioning was visible on Finland’s Baltic shores.
Deliveries to China
Deliveries to China via the Sila Sibiri 1 trunkline have been “persistently running above contracted daily gas supplies”, Gazprom said.
The company is also working on alternative solutions for the development of South Kirinskoye and Kirinskoye offshore fields near Sakhalin Island after the US and European sanctions prohibited western contractors from providing their know-how and equipment to the country’s offshore fields.
Both fields will provide natural gas to the Sila Sibiri 3 pipeline set to deliver 10 Bcm of gas to northeastern China when the necessary cross-border connection is built.
Moscow business daily Kommersant said Gazprom has been talking to the Russian state nuclear power conglomerate to build floating nuclear reactors to power the two developments.
The floating reactors would generate electricity for Gazprom and also for regional use, according to a five-year Sakhalin energy development plan, according to Kommersant.
Two pipeline laying vessels — the Fortuna and Akademik Chersky — have reportedly been operating at the Kirinskoye and South Kirinskoye fields after being sanctioned in the west for building the Nord Stream 2 gas pipeline in the Baltic Sea.
https://www.upstreamonline.com/production/gazprom-gas-output-in-steep-decline-but-china-deliveries-not-affected/2-1-1527883?zephr_sso_ott=KDk1Uj
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