Russian President Vladimir Putin has given a go to natural gas production at the Kovykta gas condensate field. Putin gave remarks at the launch ceremony of the biggest gas field in the country’s Far East. Russia has put into operation the largest gas condensate field in eastern Siberia, the Kovykta field. It is linked to a major gas pipeline, which delivers the product to a large gas refinery in the country, as well as to China.
Russian President Vladimir Putin on Wednesday has inaugurated the Kovykta natural gas field in eastern Siberia, located strategically to allow Russia to increase gas exports to China amid growing tensions between Moscow and the West. The inauguration is the culmination of efforts that began about a decade ago to develop new fields and build the Power of Siberia pipeline to deliver to the rapidly expanding market.
The Kovykta field has an estimated extractable reserve of 1.8 trillion cubic meters of natural gas, Russian President Vladimir Putin said during the launch ceremony on Wednesday. Discovered in the late 1980s some 200km (124 miles) northwest of Lake Baikal, it is expected to contribute to the Russian energy industry for decades to come.
The gas extracted at the field will be transported via a pipeline that links it to the Chayanda field about 800km (497 miles) away. That site is the primary source of hydrocarbons transported east via the Power of Siberia pipeline, which ultimately links Russia to China. With the new section included, it now stretches for 3,000km (1,864 miles).
Some of the gas pumped through the pipeline goes to its Russian neighbor, while another part feeds production at the Amur gas refinery, one of the biggest planned facilities of its kind. The plant, which makes hydrocarbons like ethane and butane as well as helium, was launched last year, with expansion plans scheduled until at least 2025, as more raw material becomes available.
The development will “ensure the stable supply of gas and products of its refinement to Russian businesses and our foreign partners, boost social and economic development of the eastern parts of our country, and create new highly-productive jobs,” Putin emphasized.
In addition to natural gas, the Kovykta field contains an estimated 65,7 million tons of extractable gas condensate, a liquid byproduct valuable as raw material for the chemical industry. The Russian president said that the infrastructure built to serve the field includes pipelines and railroads necessary to transport it.
Putin thanked surveyors, workers, engineers, and people of other professions, who made the “remarkable achievement” of putting the Kovykta field into production possible.
“We are launching the unique Kovykta gas field, the largest in eastern Siberia. Its recoverable reserves are 1.8 trillion cubic meters of gas,” Putin said via video link during a televised ceremony.
Currently, Russia lacks pipelines to transport gas from its Western Siberian and Arctic gas fields that serve China and Europe. The first Power of Siberia pipeline began to deliver gas from eastern Siberia to China at the end of 2019. It won’t be the last. Moscow has laid out plans to build a Power of Siberia 2 pipeline as Russia increasingly turns to the Middle Kingdom in the face of heavy western sanctions.
China and India have become some of the biggest buyers of Russian oil and gas, with Bloomberg’s oil strategist Julian Lee revealing that Russia’s flagship Urals crude oil has been trading at a massive discount of more than per barrel $30, or about 40% to the international Brent crude oil, at the end of last week. In contrast, a year ago, Urals traded at a much smaller discount of $2.85 to Brent. Urals is the main blend exported by Russia. The result: Moscow is beginning to feel the heat of its war in Ukraine, and could be losing ~$4 billion a month in energy revenues, as per Bloomberg’s calculations.
Supplies of Russian pipeline gas–the bulk of Europe’s gas imports before the Ukraine war–are down to a trickle and might be further impacted after a gas pipeline in central Russia that brings gas from Russia’s Arctic through Ukraine to Europe was shut down on Tuesday following a deadly blast. Built in the 1980s, the pipeline enters Ukraine via the Sudzha metering point and currently is the main route for Russian gas to reach Europe.
China buys record amount of Russian energy
China has increased imports of fossil fuels from Russia, with LNG purchases hitting record volumes in November, according to official data Overall imports of oil, gas, and coal hit $8 billion in November, customs data shows
China purchased record volumes of Russian liquefied natural gas (LNG) last month, while imports of oil and coal have also surged, according to a Chinese customs report issued on Tuesday.
Despite a 5.4% drop in China’s total LNG purchases, Russian exports of the super-chilled fuel doubled in November compared to last year, and reached 852,000 tons worth $815.6 million. In annual terms, LNG sales from January to November surged by 39% from a year earlier to 5.82 million tons. Sales of the fuel to the Asian country jumped 150% over the same period, to $6.1 billion.
Russia has also become China’s second largest natural gas supplier after Turkmenistan, as deliveries have grown by 177% in dollar terms, reaching $3.5 billion over the first 11 months of the year. China, however, has not specified how much gas it has bought from Russia during that timeframe.
Russia boosted oil deliveries to China by 17% in November from one year earlier to 7.81 million tons, the highest total since August, overtaking Saudi Arabia as the country’s top supplier. Russian crude shipments to China over the first 11 months surged by 10.2% to reach 79.78 million tons, according to the report. In terms of value, Russian oil supplies to China in the mentioned period were worth $54.49 billion – 50% more than last year.
Coal imports from Russia, including brown coal, rose 41% to 7.2 million tons. Supplies of coking coal for the steel industry have doubled compared to last year, amounting to 2.1 million tons, but were lower than the record hit in September.
Data has shown that overall purchases of Russian energy, including oil products, hit $8 billion in November, from a revised $7.8 billion in October. The total now stands at $68 billion since the beginning of the year, compared to $41 billion over the same period last year. The record for a single month was registered in August with Russian fuel exports reaching $8.4 billion, RT reports
