Russia’s giant gas company has awarded a 2.8-billion-dollar contract to an influential company for work on building a gas pipeline to China.

Gazprom awarded Stroygazmontazh (SGM) contracts for work on building the Power of Siberia gas pipeline to China, tender documents show.

Engaged in construction work for the oil and gas sectors, SGM is owned by Arkady Rotenberg, who is a close ally of Russian President Vladimir Putin. Rotenberg was among the first Russian businessmen to face Western visa bans and asset freezes last year over the Crimean peninsula’s reunification with Russia.

Back in January, SGM was awarded a contract of the same value to build a bridge to the Crimean peninsula.

The Power of Siberia pipeline is designed to deliver 38 billion cubic meters (bcm) of gas per year to China over 30 years. First deliveries are expected in 2019.

The initial deal was signed in May 2014 between Gazprom and the China National Petroleum Corporation (CNPC).

Russia-China energy cooperation

Russia and China have said they will continue energy cooperation as part of their efforts to expand partnership.

The global energy market has seen European demand for energy falling while there has been growing willingness for gas on the part of Asian countries.

Last year, Russia started building its section of the 2,500-mile pipeline whose gas transmission system (GTS) is expected to come on-stream in late 2017. The gas production and transmission facilities in Russia are estimated to cost $55 billion.

Russian officials say the Power of Siberia pipeline will help Russia increase its gas exports and speed up the gasification process in the Far East and Eastern Siberia.

By Press TV