Russian sales of natural gas to China nears
Print Edition
RUSSIA said yesterday that it was close to signing a deal to sell natural gas to China, a long-sought agreement which President Vladimir Putin could hold up to show Western sanctions over Crimea cannot isolate his country.
The deal is the Holy Grail for Russia after at least 10 years of talks, and Moscow hopes it can be signed when Putin visits China next month, enabling it to go into force by the end of this year.
As talks between state-controlled Gazprom and Chinese officials continued in China, Arkady Dvorkovich, a deputy prime minister, said the sides were close to sealing a deal that would also involve construction of a pipeline to carry 38 billion cubic meters of gas a year.
“Regarding Gazprom’s gas contract, the sides are close to agreement ... The only issue remaining is ... the price,” he was quoted as saying by Itar-Tass news agency. “We really hope that the contract will be signed in May.”
Gazprom said separately that it made progress in the talks on the price China would pay for the Russian gas and that it expected the contract to come into force by the end of 2014.
Industry sources said before the latest round of talks that Gazprom could try to secure a deal by proposing a lower price for the gas in exchange for China handing over billions of dollars in upfront payments.
The sources said Gazprom was hoping for a price of US$10 to US$11 per mmBtu (million British thermal units) from China. China is believed to pay US$9 per mmBtu to Turkmenistan, the former Soviet state in Central Asia that beat Gazprom to the Chinese market.
The gas deal with China would help Gazprom reduce its dependency on exports to Europe, which gets around a third of its gas needs from Russia. Half of this amount comes via Ukraine, which is at odds with Moscow over gas payments and also locked in a political standoff over the Crimea region.
Gazprom has raised the gas price for Ukraine by 80 percent since its neighboring former Soviet republic ousted Moscow-backed President Viktor Yanukovich on February 22 and installed a pro-West government.
Bypassing Ukraine by using different pipelines, or reorienting trade to the East, have become priorities for the Kremlin. But Russia’s desire to find new markets has also strengthened China’s negotiating position on the price.
Gazprom has been in talks over the last 10 years about shipping gas to China and has been unable to agree on pricing.
Russia ships around 16 percent of its total crude exports to Asia, while gas volumes are small, limited only to super-cooled seaborne gas.
By 2035, Moscow plans to double the share of oil flows and send a third of its gas exports eastward.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
