China, the world’s largest energy user, has made great progress in its decade-long talks for natural gas supply with Russia, with the latter looking to cut its dependence on Europe as a major market.
Russian President Vladimir Putin is on a two-day visit to China, and it is widely expected that both parties will sign a gas supply contract worth about US$400 billion.
“For Russia, implementing these agreements means diversifying gas supply destinations, while for our Chinese partners … it could be a remedy for energy shortages and help in ecological security,” Xinhua quoted Putin as saying in an interview with Chinese media ahead of the May 20-21 visit.
The preparation for a gas deal has entered “the final phase”, the report quoted Putin as saying.
Under the agreement, Gazprom, Russia’s state-owned natural gas giant, will supply China National Petroleum Corp (CNPC) with 38 billion cubic meters of natural gas annually for 30 years.
“The visit is not over yet. Talks will continue … substantial progress is reached but there is still work to be done on pricing,” Putin’s spokesman, Dmitry Peskov, was quoted as saying in media reports. “Talks are going on today, and [an agreement] can happen absolutely any moment.”
The two sides are likely to agree at a price of US$350-US$380 per 1,000 cubic meters, Russian newspaper Izvestia reported, citing a Gazprom employee.
The talks have dragged on for over a decade, with negotiators unable to reach an agreement on price, gas pipeline route, and possible Chinese stakes in Russian projects, media reports said.
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