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Russia commits USD 38.4bn to conquer Asia

30th October 2012

Gazprom unveils USD 38.4bn plan to launch gas field and pipeline in Russia’s far east

Russia commits USD 38.4bn to conquer Asia
Gazprom caters to 40 per cent of the EU’s energy needs and exported around 150 billion cubic meters of gas to the region in 2011

Gazprom will spend USD 38.4bn launching an East Siberian gas field and pipeline to Vladivostok by the end of 2017, Interfax quoted the company’s chief executive Alexei Miller as saying on Monday. The move follows plans by the Russian gas giant to lessen its reliance on exports to Europe and develop Asian markets where energy demand is growing substantially.

Chief executive Alexei Miller told president Vladimir Putin that the firm would allocate USD 13.63bn to launch the Chayanda field in Russia's far east and USD 21.41bn on a pipeline to Vladivostok on the Pacific coast.

Developing Chayanda, which holds around 1.3 Tcf of gas, and another giant field, Kovytka, is the next stage of Russia's Eastern Gas Program, according to Putin. "I want to remind you that we agreed that the gas from these fields will primarily go for domestic needs, for domestic use," Putin told Miller, Interfax reported. "But considering the huge reserves. we can also create separately a centre for export, oriented toward the Asia Pacific region."

Gazprom said in September that it would speed up plans to boost shipments east after the European Commission launched an anti-trust investigation into the company's practises in central and eastern Europe. Gazprom caters to 40 per cent of the EU’s energy needs and exported around 150 billion cubic meters of gas to the region in 2011. It has recently been looking for new ways to lessen its dependence on exports to Europe and increase gas exports to countries in the Asia-Pacific region.

Russia is the second-largest natural gas producer and the largest oil producer in the world. The country is turning to the East Asia market where demand for energy - particularly in China, Japan and South Korea – is growing. It plans to send oil east to China and its Pacific coast through pipelines that are currently under construction.

Russia and Japan in September signed a deal to develop a liquefied natural gas (LNG) plant in Vladivostok. Miller said that the plant would cost around USD 6.99bn and be completed by 2018. He said it would have a capacity of at least 10 million tonnes of LNG per annum.

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