Russia says crucial gas deal still being finalized
Source: Agencies |
June 17, 2011, Friday
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Print Edition
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China and Russia are still finalizing documents over a crucial gas deal, Russian President Dmitry Medvedev said after a meeting with Chinese President Hu Jintao yesterday.
The two sides have been bogged down in disagreements over pricing for the gas that Russia's state-controlled Gazprom would pump to China.
It had been widely expected that a deal would have been signed during Hu's state visit to Russia.
"At the moment, documents on gas supplies to China are being finalized," Medvedev told reporters in the Kremlin after his talks with Hu. "This is a strategic document, meant for the decades ahead."
Hu said Russia and China viewed energy as a "key area" for cooperation.
"Both sides are willing to keep pushing forward this cooperation on a mutually beneficial, win-win basis," Hu said. "I believe that with the joint hard work of both sides, Sino-Russia relations will get better and better, which will benefit both peoples."
Russian Deputy Prime Minister and energy tsar Igor Sechin, speaking after Hu and Medvedev's briefing, said the talks had "advanced considerably."
In 2010, Gazprom and China National Petroleum Company agreed to start the supplies via a yet-to-be-built Altai pipeline in 2015, but the talks stalled over pricing.
Russia wanted to link the price to oil prices the way it does in Europe, but China considers any European-level price too high.
Gazprom's European customers buying gas on long-term contracts often pay significantly more than those purchasing it on the spot market.
China, which currently buys piped gas from Turkmenistan and Kazakhstan and also gets liquefied natural gas from Australia and Yemen, wants a significantly lower price.
Gazprom said the construction of the Altai pipeline intended to supply China with natural gas will start in mid-2011 and will be completed by 2015. It will bring up to 70 billion cubic meters of gas to Shanghai annually.
Despite the failure to strike a deal yesterday, Medvedev and Hu hailed trade ties between the countries.
Hu said bilateral trade approached US$60 billion last year - making China Russia's biggest trading partner - and is expected to reach US$200 billion by 2020.
Hu was meeting Prime Minister Vladimir Putin later in the day at the headquarters of Gazprom.
The two sides have been bogged down in disagreements over pricing for the gas that Russia's state-controlled Gazprom would pump to China.
It had been widely expected that a deal would have been signed during Hu's state visit to Russia.
"At the moment, documents on gas supplies to China are being finalized," Medvedev told reporters in the Kremlin after his talks with Hu. "This is a strategic document, meant for the decades ahead."
Hu said Russia and China viewed energy as a "key area" for cooperation.
"Both sides are willing to keep pushing forward this cooperation on a mutually beneficial, win-win basis," Hu said. "I believe that with the joint hard work of both sides, Sino-Russia relations will get better and better, which will benefit both peoples."
Russian Deputy Prime Minister and energy tsar Igor Sechin, speaking after Hu and Medvedev's briefing, said the talks had "advanced considerably."
In 2010, Gazprom and China National Petroleum Company agreed to start the supplies via a yet-to-be-built Altai pipeline in 2015, but the talks stalled over pricing.
Russia wanted to link the price to oil prices the way it does in Europe, but China considers any European-level price too high.
Gazprom's European customers buying gas on long-term contracts often pay significantly more than those purchasing it on the spot market.
China, which currently buys piped gas from Turkmenistan and Kazakhstan and also gets liquefied natural gas from Australia and Yemen, wants a significantly lower price.
Gazprom said the construction of the Altai pipeline intended to supply China with natural gas will start in mid-2011 and will be completed by 2015. It will bring up to 70 billion cubic meters of gas to Shanghai annually.
Despite the failure to strike a deal yesterday, Medvedev and Hu hailed trade ties between the countries.
Hu said bilateral trade approached US$60 billion last year - making China Russia's biggest trading partner - and is expected to reach US$200 billion by 2020.
Hu was meeting Prime Minister Vladimir Putin later in the day at the headquarters of Gazprom.
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