Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the Vedomosti business newspaper on the possible benefits for Russia from the Power of Siberia 2 gas pipeline project.
Legally binding agreements on the pipeline construction are the breakthrough, Alexey Gromov says. An even greater success for Gazprom may be the conclusion of a gas supply contract along this route, the expert notes. To sign it, the parties have yet to reach a compromise on the price of supplies. According to Gromov, China initially insisted on the cost of supplies at the level of domestic Russian prices, and Russia would like to supply gas on the same terms as for the Power of Siberia, i. e. with the price linked to the cost of the Asian oil product basket (currently it is about $265-285 per 1,000 cubic meters).
The implementation of the Chinese project will also allow Gazprom to monetize gas reserves in Western Siberia, the expert notes.
According to Alexey Gromov, China will not be able to replace the European market for Gazprom in terms of profitability, since exports to the West have always been a premium for the company.
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