OREANDA-NEWS. October 03, 2014. Deliveries of Kazakh gas to China reached 210 million cubic metres (MMcm) in July, their highest level yet. Shipments in June were 30 MMcm, according to Chinese customs data.

In July 2013, the first month Kazakhstan started delivering gas to its eastern neighbour, the Central Asian country exported 4 MMcm to China.

Kazakhstan remains China’s cheapest source of pipeline imports. China paid \\$3.38/MMBtu for Kazakh pipeline gas, compared with USD9.43/MMBtu for gas from Turkmenistan and USD 11.16/MMBtu for gas from Myanmar. China paid USD 18.28/MMBtu for LNG imports from Yemen in July.

Kazakhstan’s gas is cheap because Guanghui Energy, the company which buys the gas, has a 49% upstream stake in eastern Kazakhstan’s Zaysan field. The price is also low because Guanghui Energy is a private company – and therefore more flexible than state-controlled firms – and because the Chinese and Kazakh governments have a good relationship, a source told Interfax last year.

Guanghui Energy has built a 110 km pipeline from the Zaysan field to a liquefaction project the company operates in Jeminay county in China’s Xinjiang Uyghur Autonomous Region.

Turkmenistan remains the largest Central Asian exporter of gas to China. It delivered 2.19 billion cubic metres in July – 75% of China’s pipeline imports.

Nearby neighbour Azerbaijan is considering increased exports to the west from the Shah Deniz field in the Caspian Sea, via the Trans-Adriatic Pipeline. Initial capacity will be 10 bcm and could be expanded to more than 20 bcm.