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FSUOGM: Russia makes progress on Far Eastern gas supply project to China

Russia appears to be finally making headway on finalising plans for a third gas pipeline to China that would run from the Far East, providing a means of monetising unused gas at fields off the east coast of Sakhalin Island.

A resolution signed by Prime Minister Mikhail Mishustin at the end of last week has paved the way for the finalisation of an intergovernmental agreement with China on the construction of a 60-km section of the pipeline running between the Russian town of Dalnerechensk to the Chinese town of Hulin. Gazprom and CNPC will both take part in laying the pipeline. The cross-border link will be supplied with gas via the existing Sakhalin-Khabarovsk-Vladivostok (SKV) pipeline, which is undergoing an expansion in its capacity.

Russia and China signed an intergovernmental agreement on the supply of 10bn cubic metres per year of gas from the Far East in February 2022, weeks before Moscow launched its invasion of Ukraine. Since then, Gazprom’s loss of most of its market share in Europe has made the push to expand sales to China all the more urgent. Gazprom and CNPC went on to sign a technical agreement on the project in June last year.

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