The Gas Must Flow! Both Europe and China Want More Russian Shipments to Fuel Consumption
New natural gas shipments to Europe, Turkey, and China were announced today at the gas forum in St. Petersburg by Gazprom CEO Alexey Miller.
Nailya Asker-zade with the details.
— Good evening, Nailya. How's the construction of the pipeline to Europe going?
— Igor, the construction of the marine section of the TurkStream will be finished in two months.
Two pipelines will go through the Black Sea; the first will supply gas to Turkey and the second to Southern and South-Eastern Europe. It will start operating in late 2019. However, some European states oppose the construction of the pipeline. And Kiev even declared that putting the second TurkStream pipeline into operation threatens the transit through its territory and the whole Ukrainian economy. In the meantime, Gazprom's share of the European market is on the rise. The Russian company currently owns one-third of the gas market. Russian President Vladimir Putin recently said that he expects the figure to keep growing.
Vladimir Putin: “Now, they regret it. Now, they want to get our gas through the TurkStream. We don't all of whole Europe looking like Bulgaria showing its weakness and inability to defend its national interests. The demand is growing and will keep growing. Is Europe going to buy the 30% more expensive gas from other regions, including the USA? It's possible but it would be silly and wasteful, you see?”
For now, Europe is satisfying the growing demand by purchasing Russian gas.
Alexey Miller, CEO of Gazprom: «Over the last 12 months the load on the Nord Stream exceeded its designed capacity by 7%. I'd like to remind you that its designed capacity is 55 billion cubic meters but our technological capabilities allow us to export a bit more. Over the last 12 months, we exported 59 billion cubic meters of gas through it. So demand of the Nord Stream as a transport corridor from Russia is more than 100%. It's the answer to the question of do we need Nord Stream 2.”
— By the way, when will the Nord Stream 2 start operating?
— Gazprom promised to put it into operation on January 1, 2020. The project implies the construction of a pipeline from the Russian coast to Germany through the Baltic Sea. It'll pass through the economic zones and territorial waters of five states: Russia, Finland, Sweden, Denmark, and Germany. The land section of the pipeline has already been installed. The only thing standing in the way is Denmark which isn't allowing the Nord Stream 2 through its territorial waters.
— What about shipments to China? Do we expect them to grow?
— Gazprom and its Chinese partners are discussing gas shipments via the Power of Siberia pipeline beyond the contract volumes. The shipments will begin in December of 2019. On one hand, the demand for our gas in Beijing grew by almost 25% last year. On the other hand, the Chinese are purchasing less natural gas vehicles. Meanwhile, the sales of the cars that use new sources of energy are skyrocketing. So their gas consumption might even decrease, Igor.
— Thank you, Nailya Asker-zade.