Putin, Gazprom chief discuss major Russian export lines

Alexey Miller, chairman of Gazprom’s management committee, met with Russian President Vladimir Putin to discuss pipeline exports of Russian natural gas. Miller updated Putin on the Nord Stream and South Stream lines, while Putin tasked Miller with developing the Yamal II pipeline and a gas branch to the Kaliningrad region.

Putin brought up the Kaliningrad tie-in when referencing Gazprom’s continuing discussions regarding construction of a third Nord Stream string that would deliver Russian gas directly to the UK (OGJ Online, Oct. 9, 2012), suggesting the line also could supply the geographically separated Russian enclave. He also noted that Gazprom’s focus on Nord Stream and South Stream had halted progress on Yamal II, intended to supply Poland, Slovakia, and Hungary.

Miller said South Stream’s first branch would be completed in December 2015, delivering gas to Bulgaria, with completion of the full system anticipated by December 2017. He also said Gazprom was ready to start a prefeasbility study on Yamal II, which would parallel Yamal I’s routing through Belarus as the most cost-efficient available path.

Yamal II’s capacity would be 15 billion cu m (bcm)/year, Miller said, with construction not expected to begin until completion of work on South Stream. He estimated Yamal II would enter service in 2018-19. Gas supplies to Poland would be shipped on a nontransit basis, for use in-country only, according to Miller.

A recently completed feasibility study on a Nord Stream branch to Kaliningrad concluded one could be built from either of Nord Stream’s first two lines. Miller said forecasts show Kaliningrad demand peaking at 4.6 bcm/year and that it currently gets 2 bcm/year via Lithuania, leaving a 2.1 bcm/year shortfall. Nord Stream management agrees with the project’s technical feasibility and must now get shareholder approval.

Putin asked if gas could instead be supplied from a third Nord Stream line if for some reason approval was not granted for a branch from either of the existing pipes and Miller responded in the affirmative.

Contact Christopher E. Smith at chriss@ogjonline.com.

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