Figure 1. Potential interconnections to bring Russian gas into China (Washington Post )
It is equally of interest to see where the other ends of the potential pipelines lie, since this locates the natural gas fields that will be used to provide the supply. Looking at the distribution of pipelines and fields, the current preponderance of connections into Europe is hard to miss, at the same time as is the large gap in development in the Eastern side of the country.
Figure 2. Natural gas basins in Russia (Oil Peak )
Thus while the potential connection from Urumqi to Gorno-Altaisk allows the Chinese pipeline into a feed from the network that supplies Europe, that market is not going to go away. Yet the two towns are just 560 miles apart and the connection has been known as the Altai project, or Western connection, since it was first planned over 10 years ago, extending a new pipe up towards Yamal and the basins that feed Europe.
Figure 3. The Altai pipeline project (Gazprom )
Developments that reach up into Eastern Siberia, above Lake Baykal and Mongolia into the fields of Kovyktinskoe and Chayandinskoye through the “Power of Siberia” pipeline will allow gas from those fields to also feed Western China.
Figure 4. The connecting fields and pipelines for natural gas from Eastern Siberia (Gazprom )
The gas fields will feed into gas production facilities in Irkutsk and Yakutsk with oil production scheduled to start from Chayandinskoye this year, and natural gas production to follow by 2017. The field is expected to yield 25 billion cu m of natural gas and 1.5 million tons of oil a year at full production, and is estimated to hold 1.2 trillion cu m of natural gas. Kovyktinskoe was licensed to Gazprom in 2011 for exploration and production and is estimated to hold natural gas reserves of 1.5 trillion cu m. Smaller local fields at Bratsk and Chikanskoye have been developed since 2007, with the gas being used locally to supply the region.
Figure 5. Developing natural gas fields in Eastern Siberia (Gazprom )
These two fields alone therefore seem capable of meeting the current sales volume that is to be needed for China, given that the time to delivery is some four years, and both fields are anticipated to be on line, with the gas production facilities, within three years.
Pipeline construction is already underway. The “Power of Siberia” will initially connect into Vladivostock, taking the natural gas to the higher demand industrial Eastern China, but likely the additional funding that China is now providing will also help the Westward expansion to the Western gateway.
Figure 6. The Power of Siberia natural gas pipeline as planned. (Gazprom )
The natural gas pipeline is being routed along with the East Siberia – Pacific Ocean (ESPO) oil pipeline to simplify logistics, the second section of which was opened by President Putin at the end of 2012, a year ahead of schedule. The two sections will have a capacity of handling 80 million tons of oil a year (roughly 1.6 mbd) as supplies increase from the different fields to achieve that target. (The largest current contributor is the Vankor field producing slightly more than 500 kbd).
Yorubcheno-Tokhomskoye is expected to come on line in 2017, reaching full production of around 100 kbd by 2019, as the field develops the natural gas associated with the field will also be brought into the network.
There is anticipated to somewhere around 60 trillion cu. m of natural gas in Eastern Siberia (about 23% of the Russian reserve in 2009) and as this is only now being developed and the infrastructure put in place, it can be expected to last for some considerable time.
So far I have not mentioned the reserves that are now on line at Sakhalin Island. Gazprom built the Sakhalin–Khabarovsk–Vladivostok pipeline in 2011and this carries the natural gas down to Vladivostok, and thence largely into China and other Asian markets. The island also has an LNG facility which supplies that fuel to Japan and North Korea.
Figure 7. Natural gas pipeline from Sakhalin Island (Gazprom )
The pipeline is intended to carry up to 30 bcm per year of natural gas from Sakhalin fields, particularly those offshore.
Given the size of the fields that are thus available to Russia and that will feed into pipelines that will be in place at the time called for in the new agreement it is clear that the new market will not likely require any input from the fields that are currently supplying Europe and other markets.
As industries switch out of coal and into natural gas, however, a change driven partly by environmental and partly by cost considerations, so the demand for natural gas may potentially increase significantly. (As a minor indication of this the primary fossil fuel at the university in town is now natural gas and the coal fired plant just closed). There is less capacity to store natural gas than other fuels, which can raise some concerns over available supply in particularly cold days of the year. Such factors may change the situation somewhat, but realistically I would suspect that natural gas will play an increasing role in global fuel supplies for at least another decade.