Russia To Confirm Power of Siberia 2 Pipeline Costs Next Year

There has been much speculation about the financial arrangements and costs of building the Power of Siberia 2 gas pipeline between Russia, Mongolia and China, with Russian Energy Minister Sergei Tsivilev clarifying details at the Eastern Economic Forum currently taking place in Vladivostok.

He said that the financing scheme for the project and other issues need to be finalised quickly, stating, “The signed memorandum takes into account the main parameters – it will pass through Mongolia, and the supply volume is 50 billion cubic meters per year.” The project is very complex; it will require the construction of large pipeline lines, so now we will move on to active work to finalise this project, and then we will be able to speak specifically about the timelines and finances of this project. So far, all this has been done at the pre-feasibility study level. Now we will have to work out the financing schemes and everything else. Without signing this memorandum, further work was impossible. Now we have freedom of action; we have been given permission, so we will finalise this scheme quickly. This will be worked out next year.”

Tsivilev also said that design work is underway to increase the capacity of the already built Power of Siberia gas pipeline from 38 bcm to 44 bcm of gas per year, as agreed during the meetings between the Russian, Mongolian and Chinese presidents earlier this week.

He added that “Design work is currently underway to increase capacity. After this is completed, we will announce specific timelines. For now, the design capacity is fixed at 38 billion cubic meters; to reach the level of 44 bcm, additional changes to the project will need to be made,” he said.

Alexei Millar, Gazprom’s CEO, has previously said that the Power of Siberia 2 project will be the largest-ever construction project carried out on the Eurasian continent.