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Highlights

Power of Siberia now set to begin flows on December 1

Small adjustment could still impact on China demand

Gazprom, CNPC also discuss flows via western route

London — Gas giant Gazprom plans to start flows of Russian natural gas to China via the 38 Bcm/year capacity Power of Siberia pipeline almost one month early, the company said Friday.

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Following talks with its Chinese partner CNPC in Beijing, Gazprom CEO Alexei Miller said flows would start on December 1 -- ahead of previous guidance of December 20.

While only a small adjustment, the change could impact Chinese demand for its pipeline imports from Central Asia and its LNG imports next winter.

"The construction of the Power of Siberia gas pipeline is ahead of schedule," Miller said.

"Gazprom will begin supplying gas to China ahead of schedule -- from December 1, 2019," Miller said.

The 2,200 km line will initially be filled with gas from the giant Chayandinskoye field before gas from the Kovykta field is added to the supply.

EXPORT RAMP-UP

Gazprom has said it expects to begin gas exports to China at a level of around 5 Bcm/year in the first year of operations through the Power of Siberia.

In the second year of operations -- 2021 -- supplies are expected to ramp up to 10 Bcm before ramping up to capacity in 2022-23.

Russia also has plans to send another 30 Bcm/year via a western route to China in the future, with talks having resumed at the highest level after negotiations seemed to have stalled.

At the meeting with CNPC chairman Wang Yilin, Gazprom said "special attention" was paid to the western route.

Gazprom added that China had become the largest importer of gas in the world in 2018, with imports of 125.7 Bcm, up 31% year on year.

"At the same time, the largest increase occurred in LNG since China does not currently have the ability to fully meet the growing gas consumption through existing pipelines," Gazprom said.

Moscow and Beijing are eyeing ever closer relations in the energy sphere, particularly given that they have a common economic rival in the guise of the US.

Russia is under US sanctions due to its role in the Ukraine conflict while the US and China continue to wage their trade war.

-- Stuart Elliott, stuart.elliott@spglobal.com

-- Edited by Ikhhlaq Singh Aujla, newsdesk@spglobal.com