Russia’s Gazprom will invest 839.2 billion roubles ($18.1 billion) next year, the bulk for development of the Yamal peninsula gas deposits and also including research for a new gas pipeline route to China, the company said on Thursday. This is down from more than 1 trillion roubles earmarked for 2014, a figure that had initially been set at 806 billion roubles.
Gazprom signed a memorandum at the weekend that it hopes will lead to shipments of an additional 30 billion cubic metres (bcm) of gas a year to China via the so-called western route. The company also said it is ready to start construction of the undersea part of the South Stream gas pipeline via the Black Sea to Europe.
The pipeline, designed to carry 63 billion cubic metres of Russian gas to Europe after 2018, has met stiff resistance from the European Union, which is trying to wean itself off its dependence on energy from Russia. Relations between the two have worsened sharply this year after Moscow’s intervention in Ukraine led the EU to impose sanctions, including on Gazprom. The EU has said the project violates its regulation on third-party access to pipelines.
Gazprom was banned from buying equipment for deep water, shale oil and Arctic offshore projects. However, unlike many other Russian companies, it was not barred from Western capital markets. Gazprom did not mention the impact of sanctions on Thursday. Last month, the Russian company said that foreign banks’ caution about Western sanctions means financing of the South Stream gas pipeline project has been slightly delayed. (1 US dollar = 46.3650 Russian rouble)