Gazprom pipelines and export capacity

Газопроводы Газпрома и экспортные мощности

Gas pipelines of West Siberia

Газопроводы Западной Сибири

Export flows of Gazprom

Экспортные потоки

Spot, Gazprom, Brent

Цены на нефть и газ

End-use price of gas

Russia and USA

Daily gas production

Суточная добыча


Provisional cost of "Power of Siberia" unaffected by the reduction of pipeline length


Forbes.Ru comment points out peculiarities of the reported investment cost of "Power of Siberia". Specifically, the estimated cost stayed intact when the pipeline length was cut by one third and the installed compressor capacity was reduced by 7 percent.

Year

Pipeline length, km

Installed capacity, MW

Estimated cost, Thous. Rub.

 

"Power of Siberia"

 

(at prices of 01-01-2011)

2015

3246.8

1282

799,911,570.00

2016

2154.5

1186

799,911,570.00

2018

2157.9

1186

799,911,570.00

 

"Southern Corridor"

 

(at prices of 01-01-2012)

2015

2339.0

1516

714,673,039.80

Source: Gazprom

In 2015, Gazprom informed its shareholders and investors that 1 km of the new export pipeline in East Siberia would cost ₽246 Million and 1 km of "Southern Corridor" over ₽270 Million (net of the cost of the "Russkaya" compressor station at the Black Sea). "Southern Corridor" is built in the plains of Southern Russia, along the ROW of existing pipelines and close to railways and roadways, while a good part of "Power of Siberia" runs in the middle of nowhere.

Section of "Southern Corridor". Map source: Gazprom

It is several times more expensive to deliver a ton of steel pipe by rail from a mill in European Russia to East Siberia than to the ROW of "Southern Corridor". It is dozens of times more expensive to deliver the pipe from an East Siberian railway station to the ROW.

Obviously, "Southern Corridor" is overpriced - 1 km of this pipeline is three times more expensive than 1 km of German OPAL (same diameter, higher capacity) commissioned in 2011. Note that now Gazprom plans to decommission (actually, dig out) 506 km of "Southern Corridor".

The attitude to the reported investment cost of "Power of Siberia" indicates that Gazprom may not know and/or does not care about the actual expenses. After the reduction of the pipeline length, the unit cost can be calculated as ₽371 Million per km, but this is just another virtual number. Only the contractors of Gazprom know the real cost.

Mikhail Korchemkin

East European Gas Analysis

Malvern, PA, USA

 

March 29, 2018

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Last modified: 03/29/18                    East European Gas Analysis 2006-2018                                           Email: info@eegas.com
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