UPDATE 2-Gazprom unveils $38 bln gas project to conquer Asia

Mon Oct 29, 2012 12:57pm EDT

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* Gazprom seeks to focus more on Asia, diversify from Europe
    * Company to build LNG plant in Vladivostok
    * Russia seeks gas sales to China


    By Gleb Bryanski
    NOVO-OGARYOVO, Russia, Oct 29 (Reuters) - Russia's Gazprom
 committed more than $38 billion to develop an East
Siberian gas field and build a pipeline to the Pacific port of
Vladivostok to lessen its reliance on exports to Europe and
develop Asian markets.
    Russian President Vladimir Putin has ordered Gazprom, the
country's pipeline gas export monopoly, to forge close ties with
fast-growing Asia Pacific consumers, such as China and Japan, 
to offset sagging demand in Europe.
    On Monday, Gazprom's Chief Executive Alexei Miller told
Putin the company would invest 770 billion roubles ($24.5
billion) to build the 3,200 km (2,000 mile) pipeline from the
East Siberian Chayanda deposit to Vladivostok.
    He said 430 billion roubles ($13.7 billion) would be
invested in development of the field.
    "We can create another exporting centre oriented to
Asia-Pacific region," Putin said adding that the East Siberian
region has huge gas resources.
    Gazprom, in partnership with Japanese companies, plans to
build a liquefied natural gas (LNG) plant in Vladivostok, which
may come on stream by 2020 with production of between 10 million
and 20 million tonnes. 
    Miller said the pipeline was expected to connect Vladivostok
in 2017 with the field, which has estimated resources of 1.3
trillion cubic metres of gas. 
    "In the nearest future, we are able to create gas exporting
capacity comparable to that of European gas exports," Miller
said.
    Gazprom's gas exports to Europe, where it covers a quarter
of gas needs, are expected to fall this year from the 150
billion cubic metres it shipped in 2011.
    Russia, the world's second-largest gas producer after the
United States, has a sole LNG-producing plant, Gazprom-led
Sakhalin-2 project, which produces 10 million tonnes of the
froze gas a year. 
   Gazprom's another LNG project, designed on the basis of
Shtokman gas field in the Barents Sea, has been postponed due to
costs overrun.
 
    Gazprom will also develop other East Siberian fields, such
as Kovykta, to feed the eastern route.
    Russia has long eyed pipeline gas exports to China, the
world's top energy user, but the two neighbours have been unable
to agree on pricing, funding and routes.
    There has also been delay in decision-making in China ahead
of a once-in-a-decade change of political leadership.
    Russia has planned to ship as much as 68 billion cubic
metres of gas to China.
    Miller told reporters that there is a "positive dynamic" in
China talks.
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