Gazprom bid to cut off China gas

Russian energy giant Gazprom has asked the government to cancel an agreement to pipe large quantities of gas to China from fields in Siberia. Alexander Ananenkov, the group's deputy chief executive, said plans to deliver 80bn cubic metres of gas a year to China would leave Russia short.

The gas was due to be exported from Exxon Mobil's Sakhalin-1 project on Russia's Pacific coast. If the Russian government responds to Gazprom's proposal and intervenes in the export agreements on Sakhalin-1, China will not have any access to Russian gas, despite a growing need for energy supplies to power its booming economy.

Such an action will also heighten concerns over the growing influence of state-run Gazprom and the Kremlin's grip on its domestic gas industry. Russian gas accounts for 25% of supplies to the European Union (EU). But critically, it means that gas shortages in Russia must be more serious than what is being said, analysts believe.

(2007-07-05 12:35:53 SGT) [Energy] Permalink

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