MOSCOW: For the second year in a row the Russian gas monopoly is reducing its budget for the construction of the Power of Siberia pipeline, through which it intends to supply gas to China, and is postponing the construction of the LNG plant that would have supplied Japan and South Korea.
In 2016 Gazprom will spend only 92 billion rubles ($1.17 billion) on the construction of the Power of Siberia pipeline, which will supply gas from Yakutia to China. In 2015, the company said it would spend 200 billion rubles ($2.6 billion) on the pipeline. Gazprom had already implemented cuts in the beginning of last year.
Despite this decision, company representatives say construction is going on ahead of schedule.
In the beginning of February, Gazprom revealed another change in its Asian plans. The company had postponed a project it launched in 2011: The construction of a liquefied natural gas (LNG plant) with a capacity of 10 million annual tons in the Primorye Territory. The main customers of the plant would have been Japan and South Korea.
One of the reasons for postponing the project may have been Gazprombank’s refusal to finance it. According to the Kommersant newspaper, the decision could have been related to the western sanctions imposed on the bank.
