Gazprom Increases Spending In 2018

Map courtesy of Gazprom.

Gazprom’s Management Committee has approved a draft of the company’s 2018 budget, increasing its spending by about 13% when compared to 2017 spending. According to Gazprom’s draft investment program for 2018, the overall amount of investments will stand at US$21.8 billion, with US$13.6 billion intended for capital investments, US$699 million for the acquisition of non-current assets, and US$7.4 billion for long-term financial investments.

Gazprom’s 2018 investment program covers the company’s strategically important projects, including the construction of the Amur Gas Processing Plant and the Power of Siberia pipeline, which target Russian gas supply to China; and the TurkStream and Nord Stream 2 gas transmission projects which target Europe.

The Amur Gas Processing Plant, when completed in 2021, will be the largest gas processing facility in Russia. Located near the city of Svobodny, in Russia’s Amur Region, it will serve as an essential link in supply of natural gas to China via the Power of Siberia pipeline.

Construction of the Amur plant began in October 2015. The stage-by-stage commissioning of its production trains will be synchronized with the development of Gazprom’s production capacities in Yakutia and the Irkutsk Region. The Yakutia gas production center is primarily meant to provide gas to Russian consumers. By developing this center, Gazprom will create the necessary conditions for gas supply to and gasification of Yakutia and other regions in Russia’s Far East.

The Power of Siberia, scheduled to begin gas flow in December 2019, will be the largest gas transmission system in east Russia, traversing three Russian constituent entities – the Irkutsk and Amur Regions and the Republic of Sakha (Yakutia). The Power of Siberia gas trunkline will transport gas from the Irkutsk and Yakutia gas production centers to China. Gazprom and China National Petroleum Corp. signed a 30-year sales and purchase agreement for 1.3 Tcf (38 x 1012 m3) per year of gas to be supplied to China via the Power of Siberia.

Gazprom continues to create new routes for gas exports to Europe. One of the year’s major developments was start of construction on the TurkStream gas pipeline, a new export gas pipeline connecting Russian gas reserves to the Turkish gas transportation network, providing energy supplies to Turkey as well as southern and southeastern Europe. When it comes online in 2019, TurkStream will have the throughput capacity of 1.1 Tcf (31.5 x 1012 m3).

Nord Stream 2, a new 745-mi. (1200-km) export gas pipeline running from Russia to Europe across the Baltic Sea, is scheduled to begin operation in 2019. The decision to build Nord Steam 2 was based on the success of the Nord Stream gas pipeline. The entry point of Nord Stream 2 into the Baltic Sea will be the Ust-Luga area of the Leningrad Region. Then the pipeline will stretch across the Baltic Sea. Its exit point in Germany will be in the Greifswald area, close to the exit point of Nord Stream. The aggregated design capacity of Nord Stream and Nord Stream 2 is 3.8 Tcf (110 x 1012 m3) of gas per year.

The draft budget now goes before Gazprom’s Board of Directors for final approval.

 

Map courtesy of Gazprom.
Equipped with 14 Ladoga GCU compressor units, the Russkaya Compressor Station will play a critical role in TurkStream gas pipeline.