China’s annual imports from the Yamal natural gas project in the resource-rich Arctic region are set to solve winter gas shortages in the country, particularly in northern China. This move will further secure China’s energy security by providing increasing supplies of natural gas, according to an executive from China National Petroleum Corp (CNPC).
Jiang Qi, general manager of CNPC Russia, a subsidiary of China’s largest oil and gas producer, highlighted the significance of China’s imports from the Yamal project in boosting the country’s oil and gas reserves. This, in turn, will ensure a steady and long-term supply of natural gas for China. CNPC, an investor in the project, projects that China will take more than 4 million metric tons from Russia’s Yamal liquefied natural gas project each year once it is fully operational.
In a strategic move back in September 2013, CNPC acquired a 20 percent stake in Oao Novatek’s $27 billion Yamal project for $5.4 billion. This investment has proven to be crucial in bridging the gap in China’s gas supply during the winter months. Jiang emphasized the natural complementarities between China and Russia in energy cooperation, which has been reinforced by the establishment of a long-term oil and gas cooperation framework through projects like the Sino-Russia crude oil transmission pipeline and the natural gas pipeline currently under construction.
Furthermore, the Yamal project has played a pivotal role in promoting the construction of the Northeast Passage in the Arctic Ocean, a sea route directly linking China and Europe. Jiang noted that as many as 54 freight vessels have already traveled through this passage, and with the project’s expansion, more liquefied natural gas (LNG) will be transported through this sea route, significantly reducing freight costs between China and Europe.
The involvement of Chinese shipyards in the Yamal project has been instrumental in accumulating technology and experience in oil and gas exploration in the Arctic region. Chinese enterprises have taken on significant responsibilities in the project, with 85 percent of the module construction handled by them. In addition, Chinese companies have constructed seven transport ships and are operating 14 out of the 15 LNG carriers involved in the project.
According to CNPC, the total contract amount for the construction of the Yamal project reached $7.8 billion, while the shipping contract amounted to $8.5 billion. This underscores the scale and importance of China’s participation in the project, which not only addresses the country’s gas shortage but also boosts its technological capabilities in the Arctic region.
The Yamal liquefied natural gas project marked a significant milestone with the loading of its first export cargo of 173,000 cubic meters of super-chilled fuel from its Arctic terminal. This achievement not only signifies the operational success of the project but also highlights the cooperation between China and Russia in the energy sector.
Moreover, the Yamal project has provided Chinese enterprises in the manufacturing sector with valuable experience and technology for operating in the Arctic region. This knowledge transfer is crucial for China’s ambition to expand its presence in the Arctic and tap into the region’s vast energy resources.
As China’s drive for cleaner energy intensifies, the country is facing a gas shortage this winter, exacerbated by Beijing’s efforts to curb coal use. To meet the rising demand for gas, Qu Guangxue, a CNPC spokesman, revealed that the company is actively negotiating with Central Asian nations for additional stocks to ensure an adequate supply of natural gas in China.
In conclusion, the Yamal natural gas project in the Arctic region represents a strategic partnership between China and Russia that not only addresses China’s winter gas shortages but also enhances the country’s energy security and technological capabilities. This collaboration underscores the importance of international cooperation in meeting the growing energy needs of countries around the world.
