Russia’s state-controlled gas giant, Gazprom, is steps closer to reaching an agreement to bring gas to China, and at the same time, has expressed an interest in participating in transportation and upstream projects in Alaska.
China exports
Alexander Medvedev, deputy CEO of Russia’s state-controlled gas giant, told shareholders he expects the parties to agree on a price for pipeline gas supplies to China in mid-2011, resulting in deliveries four years later in 2015.
After numerous delays, Gazprom and China National Petroleum Corp. signed a framework agreement that would bring up to 70 billion cubic meters/yr (6.8 bf/d) of Russian pipeline gas to China. “The company’s principle is first to sell gas before producing and delivering it to customers,” Medvedev told shareholders.
These pricing disputes kept the gas from being delivered back in October, when originally scheduled.
Alaska projects
The Russian company has recently expressed an interest in transportation and upstream projects in the US state of Alaska.
According to Gazprom CEO Alexei Miller, the gas company is focused on the planned Denali project proposed by BP and ConocoPhillips to bring gas from Alaska’s North Slope to markets in the Lower-48 states.
The project includes a 48-inch diameter pipeline with capacity of 4.5 bcf/d from Alaska’s North Slope to Alberta, Canada. The line would start flowing in 2020 and reach capacity by 2022.
The project consists of two transmission lines, a $12.2-billion gas treatment plant on Alaska’s North Slope, two sections of mainline pipe and six compressor stations. A 730-mile section would move the gas through Alaska, and then into Canada through the Yukon Territory and British Columbia to Alberta at an estimated cost of $10.4 billion. The next 1,020-mile section to Alberta would cost $12.5 billion.
The project consists of a $12.2 billion gas treatment plant on Alaska’s North Slope and a large-diameter pipeline that travels over 700 miles through Alaska, and then into Canada through the Yukon Territory and British Columbia to Alberta.
The pipeline would have six delivery points within Alaska and up to four in Canada.
On June 7, the US Federal Energy Regulatory Commission approved open season plans for the natural gas pipeline project. According to Oil & Gas Journal, Denali plans to start its open season July 6, and let it and a simultaneous open season overseen by Canada’s National Energy Board run for at least 90 days (OGJ Online, Apr. 8, 2010).