Gazprom Cuts Power of Siberia Spending for 2016

Gazprom has slashed expenditures for 2016 on the Power of Siberia pipeline to 170-180 bln rubles ($2.8 bn) from 200 bn rubles, TASS has reported.

"As for the Power of Siberia last year I said that financing would stand at around 200 bn rubles in 2016 and 250 bln rubles in 2017. Now we see that in 2016 financing of the Power of Siberia will be around 10% lower than planned, meaning around 170-180 bn rubles," the Russian news agency quoted Gazprom Deputy Chairman of the Management Committee Andrey Kruglov as saying on Wednesday.

Spending in 2017 will be be around 250 bn rubles, maybe slightly higher, he added.

In 2014, Gazprom and CNPC signed the sale-purchase agreement for gas to be supplied via the eastern route (Power of Siberia gas pipeline). The 30-year agreement provides for Russian gas deliveries to China in the amount of 38 billion cubic meters per year.

In 2015, the two parties also signed an initial agreement for pipeline deliveries of natural gas from Russia to China via the western route (Power of Siberia 2 gas pipeline). At the initial stage, 30 billion cubic meters of gas is planned to be annually delivered from Western Siberian fields.