CNPC and Sakhaneftegaz unable to agree on gas pipeline route
The management of CNPC and Russian oil company Sakhaneftegaz have met in Peking, but were unable to agree on the
route of a gas pipeline running from Yakutia to North-eastern China. One company representative reported that China
has proposed the shortest route through the Irkutsk region, but Sakhaneftegaz prefers running the pipeline through
the Yakutian town of Tommot and the Chita region, as this area is flatter.
Also, in the event the pipeline is laid as Sakhaneftegaz wants, the republic will see new opportunities for making
use of its lands, used as they are mainly for transport and energy infrastructure, the company sources noted.
The two parties were likewise unable to agree on the cost of the gas. Sakhaneftegaz and CNPC agreed on the
preliminary technical and economic grounds for developing the Chayandinsk gas field and building a pipeline to China
back on June 19. The initial feasibility study covered all issues involved in gas field construction at
Chayandinsk.
The recoverable reserves are of 1.24 tcm of gas. The pipeline is supposed to be 3,500 km long for yearly exports of
at least 20 bn cm of gas. The overall project price has been estimated in $ 20 bn.
The Chinese corporation wanted a price ceiling of $ 57 per thousand cm, but Sakhaneftegaz was looking for $ 123-$ 132
for the same amount.
The two companies have been in contact since 1999. They signed a contract for the initial feasibility study in April
of 2000, according to which the Chinese company would pay its $ 500,000 cost. The work on it was finished in December
of 2001.
