China, Russia set for big gas 'breakthrough'
By Richard Fu |
June 8, 2011, Wednesday
|
Print Edition
Print Edition
CHINA and Russia are expected to reach a "major breakthrough" on a landmark gas deal ahead of a visit by Chinese President Hu Jintao to the country later this month, a foreign ministry official said.
"Before Hu's visit to Russia, it's quite possible there will be a major breakthrough in natural gas cooperation," Assistant Foreign Minister Cheng Guoping said yesterday.
Hu will visit Russia from June 15 to 18.
The two countries are discussing a 30-year contract for 68 billion cubic meters of Siberian gas to be shipped to China annually via two pipelines starting around 2015. Pricing issues, however, remain the last hurdle to overcome.
Chinese officials said last November that the two countries' proposed prices for 1,000 cubic meters of gas vary by about US$100. The annual contract volume is about 63 percent of China's gas demand in 2010.
A final deal will follow the signing of a memorandum of understanding in 2006 and a framework pact in 2009 between China National Petroleum Corp and Russia's gas export monopoly Gazprom, Russian news agency Interfax said last week. The two firms were given until Friday to finish the talks and prepare contracts for signing.
For China, the deal will provide additional volumes of gas while it will help Russia diversify its supply, said Gavin Thompson, director of China gas research at energy consultant Wood Mackenzie.
"Whatever outcome is reached in the negotiations, it will result in mutual benefits," Thompson said.
"Before Hu's visit to Russia, it's quite possible there will be a major breakthrough in natural gas cooperation," Assistant Foreign Minister Cheng Guoping said yesterday.
Hu will visit Russia from June 15 to 18.
The two countries are discussing a 30-year contract for 68 billion cubic meters of Siberian gas to be shipped to China annually via two pipelines starting around 2015. Pricing issues, however, remain the last hurdle to overcome.
Chinese officials said last November that the two countries' proposed prices for 1,000 cubic meters of gas vary by about US$100. The annual contract volume is about 63 percent of China's gas demand in 2010.
A final deal will follow the signing of a memorandum of understanding in 2006 and a framework pact in 2009 between China National Petroleum Corp and Russia's gas export monopoly Gazprom, Russian news agency Interfax said last week. The two firms were given until Friday to finish the talks and prepare contracts for signing.
For China, the deal will provide additional volumes of gas while it will help Russia diversify its supply, said Gavin Thompson, director of China gas research at energy consultant Wood Mackenzie.
"Whatever outcome is reached in the negotiations, it will result in mutual benefits," Thompson said.
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