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China signs to buy more gas

CHINA signed a 30-year deal to increase purchases of natural gas from Turkmenistan by 30 percent, state media in Turkmenistan reported yesterday.

No value was announced for the deal, which also marks a step forward in Chinese efforts to find long-term, stable energy supplies.

Chinese Vice Premier Li Keqiang met with his Turkmen counterpart on Wednesday to sign the contract, which increases gas deliveries to 40 billion cubic meters annually, state-run newspaper Neutral Turkmenistan reported.

Work on a 7,000-kilometer pipeline from Turkmenistan to China is expected to be finished by the end of the year.

"This agreement is very important for ensuring a stable, long-term and adequate supply of gas for this pipeline," Li said at an official signing ceremony, according to the newspaper.

China has also committed to lending Turkmenistan's state gas company US$4 billion on preferential terms, the newspaper reported.

No details were given, but Turkmen media last month reported that China had promised to lend US$3 billion to develop the vast South Yolotan natural gas field close to the Afghan border. An independent audit by a British company last year said the field may be one of the five largest in the world.

Li also signed an additional deal for state-owned China National Petroleum Corporation to take gas from the Bagtyyarlyk field near Turkmenistan's border with Uzbekistan, the newspaper reported. The Turkmen government believes the field holds up to 1.3 trillion cubic meters of gas. CNPC was awarded the license to explore and develop the field in 2007.

Turkmenistan has long exported nearly all its gas to Russia, with the exception of a small amount sent to Iran.

Some international experts have voiced doubt that Turkmenistan could meet all its supply obligations, but the government insists there is enough gas to supply all buyers.


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