Cost of Power of Siberia can decrease from $55 bln to $44.3 bln

Because of the fall of the ruble rate the Gazprom’s pipeline Power of Siberia will fall in price - the cost of the main gas pipeline and development of fields in Eastern Siberia may be reduced from original $55 billion to $44.3 billion, analysts of Gazprombank calculated. According to the Gazprombank’s assessment, at least 80% of the project costs are in ruble. Given the significant weakening of the ruble and inflation in the country, the capital expenditures in dollar will be lower, the analysts say. Gazprom doesn’t comment on the calculations of Gazprombank.

Using the gas pipeline Power of Siberia, Gazprom plans to export to China to 38 billion cubic meters of gas per year for 30 years under the contract with CNPC. The basis of the resource base is the Chayandinskoye and Kovykta field in the Irkutsk region and Yakutia. In 2012, when Gazprom made the investment decision about the project, the pre-investment in equipping of the Chayandinskoye field and creation of the gas pipeline was estimated at 430 billion and 770 billion rubles, respectively. The only public assessment of the value of the entire project was made by Gazprom in 2014, junior director of Fitch Ratings’ corporations department Dmitry Marinchenko recalls. Since then, there was no reports about its change. "As for the investment in the Power of Siberia gas pipeline - they are the same. The figure, which we announced, didn’t change, it is still the same - $55 billion in dollar terms,"- chairman of the Gazprom’s Board Alexei Miller said at the end of June.