There is still no gas price agreement between Moscow and Beijing, and no agreement is likely to be signed during Russian President Vladimir Putin’s visit to China in early June, Deputy Prime Minister Arkady Dvorkovich said on Thursday.
The biggest stumbling block in a long-awaited 30-year gas deal, between the world’s largest gas producer and the fastest growing energy market, is the gas pricing formula. Russia wants to sell its gas to China for $400 per 1,000 cubic meters, the same price it sells gas to Europe, while China, which intends to buy up to 68 billion cubic meters per year, wants to pay $250.
“There is no agreement on a gas price. [The parties] will try to come to agreement but I doubt that the document will be signed [during Putin’s visit],” Dvorkovich told reporters.
Beijing will host the eighth round of the bilateral energy dialog on June 1. The talks will be held on the eve of Putin’s official visit to China on June 5-6.
In 2010, Moscow and Beijing signed a binding agreement covering creation of two export corridors to supply Russian gas to China. The first would be supplied with gas from fields in Western Siberia, while the second one envisages development of gas deposits in Eastern Siberia, Russia’s Far East and the Sakhalin shelf.
For China, imports of Russian gas will provide further supply for its rapidly growing gas market, which has already attracted increased volumes of liquefied natural gas and gas shipped on a pipeline from Turkmenistan.